CRH shares slide on US infrastructure Bill delay reports
Bank of Ireland edges higher on hopes lender will announce a return to paying dividends
CRH shares dropped by more than 3 per cent to €31.90 on Thursday
Ireland’s Iseq index stood out as a weak spot across European markets as index heavyweight CRH slid on reports that US president Donald Trump’s eagerly awaited $550 billion (€520 billion) infrastructure spending plan may be delayed.
CRH, which accounts for about 30 per cent of the Iseq, dropped by more than 3 per cent to €31.90 – in line with US-focused construction, engineering and materials stocks – after political website Axios reported that a Bill that would give effect to Mr Trump’s plan may have to wait until 2018 amid a crowded congressional to-do list.
The Iseq index of Irish shares dropped 1.1 per cent to 6,533,45 on a day when the wider European market fell only slightly, with the pan-European STOXX 600 index ending the session down 0.1 per cent after hitting a 14-month high in the previous session.
CRH’s shares have performed strongly since Mr Trump’s election on hopes that its US subsidiary Oldcastle would be a chief beneficiary from the president’s plans to boost spending on roads and bridges. CRH is due to report full-year figures next Wednesday.
Smurfit Kappa fell by 1.9 per cent to €25.21, as followers of the paper packaging sector switched out of the group and into UK rival Mondi, which reported posted a robust set of figures and issued an upbeat outlook on Thursday. Mondi shares rose by 2.8 per cent.
However, Bank of Ireland edged 0.9 per cent higher to 23.3c on hopes that the lender will announce a return to paying dividends, which have been on hold since 2008.
Britain’s blue-chip FTSE 100 index closed lower on Thursday, depressed by Barclays stock after the bank reported earnings, by mining sector shares and those trading ex-dividend.
Barclays, the third major listed British lender to report earnings this week, gave up gains made immediately after its results to end 2.6 per cent lower.
Analysts cited concerns around potential litigation costs.
Among other laggards, HSBC was down 4 per cent, while mining firms and those trading without entitlement to their latest dividend payout, which included Rio Tinto and EasyJet, were the biggest fallers.
On the upside, Intu Properties, which owns and manages shopping centres, jumped 6.8 per cent and posted its biggest gains for six years after its earnings beat expectations and it increased its dividend.
Insurer RSA rose almost 5 per cent after it posted a 2016 profit beat and increased its target for return on equity.
Centrica did not fare as well after reporting earnings. The stock lost 3.7 per cent despite the company returning to profit growth and flagging the possibility of a dividend rise after two years of shareholder payout cuts.
Germany’s DAX fell 0.4 per cent. There was little impact earlier in the session from data which confirmed the country’s economy quadrupled its growth rate to 0.4 per cent in the fourth quarter.
Dialog Semiconductor surged 6.9 per cent as the maker of chips that go in Apple’s and Samsung’s smartphones said it expected “good revenue growth” in 2017.
Technicolor, however, fell 7 per cent after the French media and entertainment company reported a net loss.
French water and waste group Veolia dropped 5.8 per cent after pushing back its forecast for core earnings by a year.
About 55 per cent companies in the pan-European Stoxx 600 have reported fourth-quarter results so far, of which 56 per cent have met and 3 per cent have beaten analyst forecasts.
Wall Street pared losses in midday trading, after Mr Trump told chief executives of major US companies that he plans to bring back millions of jobs to the US.
The Dow Jones Industrial Average was up 0.31 per cent, at 20,839.95, while the S&P 500 edged 0.09 per cent higher. However, the Nasdaq Composite was down 0.42 per cent.
L Brands plunged 16.7 per cent after the company reported weak sales at Victoria’s Secret, its biggest business by revenue.
Boston Scientific lost 3.4 per cent after the company recalled its Lotus Valve heart devices, citing reports of problems with the locking mechanism.
– (Additional reporting: Bloomberg, Reuters)