Equities make modest recovery after last week’s rout
European stocks end up and US equities rebound due to homebuilder sentiment
Shares in Irish oil and gas exploration company Providence Resources regained some ground by the close, having dipped by as much as 8 per cent earlier. Photograph: Bryan O’Brien
World equity indexes gained modestly yesterday after a rout last week. Positive US housing data helped Wall Street shrug off a weak manufacturing report, while the prospect of higher US interest rates lifted the dollar for a third day.
US equities rebounded from a lower open as a report showed homebuilder sentiment rose in August to its highest level in nearly a decade.
Expectations of an impending rate hike helped the dollar rise, as did reassurance from China fixing its yuan exchange rate slightly higher for a second day running.
Otherwise it was a relatively uneventful day on the Iseq, which added 0.4 per cent.
It was busy though for Dalata Hotels, with a lot of shares trading and closing at €4.11.
There were widespread gains in the construction sector with CRH finishing up 0.74 per cent at €27.67. Smurfit Kappa also traded reasonably well closing at €27.25 having traded as high as €27.90.
The FTSE 100 was down 0.44 points, 0.01 per cent lower, at 6,550.30. It fell 2.5 per cent last week following a drop in commodity prices after resource-hungry China devalued its currency.
Shares in mining companies touched a six-year low after the price of copper came under renewed pressure, accounting for about two-thirds of the fall in the overall index.
Glencore touched an all-time low after price-target cuts from Exane BNP Paribas and Canaccord Genuity, last trading down 1.6 per cent.
Peer BHP Billiton dropped 1.4 per cent after a downgrade by Deutsche Bank. Plumbing supplies group Wolseley gained 2.2 per cent after Citi highlighted its potential for market share gains.
The Stoxx Europe 600 Index rose 0.3 per cent to 387.52 by 4.30pm in London, recovering from a decline of as much as 0.6 per cent after a report showed manufacturing in the New York region unexpectedly shrank.
Automakers led the rally, before sliding as the US report raised concern that the global economy wasn’t strong enough to withstand a Federal Reserve interest-rate increase.
Germany’s DAX Index lost as much as 1.5 per cent before ending the day down 0.3 per cent.
Greece’s ASE Index led the gains among western European markets, climbing 1 per cent.
Alstom jumped 7.1 per cent after a report that the EU will probably approve General Electric’s asset acquisition.
Credit Agricole advanced 2.4 per cent as HSBC Holdings recommended buying the stock. Hennes and Mauritz added 2 per cent as July sales beat estimates.
The S&P 500 gained 0.3 per cent to 2,098.67 by lunchtime in New York, after falling as much as 0.6 per cent earlier.
The Dow Jones Industrial Average added 56.17 points, or 0.3 per cent, to 17,533.57, erasing a drop of 135 points. The Nasdaq Composite Index rose 0.5 per cent.
Homebuilder stocks in the S&P 500 climbed 1.8 per cent as TopBuild and DR Horton gained more than 2.1 per cent.
Tesla Motors climbed 4 per cent. Estée Lauder slid 6.3 per cent for the worst performance in the S&P 500. – (Additional reporting: Reuters, Bloomberg)