EQUITIES RETREATED for a seventh day and the euro hit a two-year low against the dollar after the US Federal Reserve damped down stimulus hopes.
The Federal Reserve’s latest policy meeting failed to signal more short-term stimulus measures to spur economic growth.
This hit investor sentiment, which was further dented by fears that the upcoming earnings season could signal a global slowdown.
A weak Asian market overnight also fed into yesterday’s risk-averse mood.
Treasuries advanced along with the bonds of other highly-rated nations on concern central banks need to take more action to sustain faltering global growth, spurring demand for assets perceived to be safe.
US 10-year yields fell to within five basis points of a record low, while bonds also rallied in Germany, the UK, Japan and Australia.
DUBLIN
THE ISEQ index took its lead from global markets yesterday, shedding more than 1 per cent as stocks sold off pretty much across the board.
However one broker noted that liquidity and volume were below average levels on the Irish market. “The market is selling off but there isn’t a huge amount of selling pressure behind it. It’s a bit of a limbo.”
Food stock Kerry Group was one of the few names to buck the downward trend, adding more than more than 1 per cent, or about 44 cents, to close just under €36.81.
CRH, which generally determines the overall direction of the Irish market by virtue of its index weighting, was weaker on the day. The stock closed 10 cents down at just below €15.08, but still outperformed much of its sector.
LONDON
BRITAIN’S TOP share index dropped on weak volume yesterday to post its biggest daily fall in nearly three weeks as growth concerns and fading hopes for near-term US monetary stimulus hit investor sentiment.
Funds house Ashmore Group was the biggest FTSE casualty, down 6.7 per cent on heavy volume after it reported the flight of about a fifth of the money it manages in equities during its fourth quarter, hit by euro zone worries and a flagging global economy.
Among miners, the biggest faller was Rio Tinto, down 3.5 per cent and taking just over five points off the index.
Rival BHP Billiton fell 3.3 per cent, and miners claimed five of the top 10 spots on the FTSE fallers list. Adding its weight to the gloomy sector outlook, Credit Suisse lowered its earnings per share estimates for the sector.
Shares in Intercontinental Hotel dropped 2.3 per cent after US-listed rival Marriott reported a higher quarterly profit but said it was seeing weakness in some international markets. The FTSE 1000 closed down 56.23 points, or 1 per cent, at 5,608.25.
EUROPE
EUROPEAN STOCKS declined the most in more than two weeks yesterday.
Temenos Group plunged 28 per cent to a three-year low after reducing its estimate for 2012 revenue growth and saying its chief executive officer quit.
Aegis Group surged 45 per cent, the most in 21 years, after Japan’s Dentsu agreed to buy the company.
Telecom Italia led telecommunication stocks lower, sliding 6.5 per cent to 70.2 cent. Revenue growth from Latin America is poised to slow to 2.7 per cent in 2013 from 12 per cent last year, according to an estimate by Sanford C Bernstein.
G4S, the world’s largest security-guard supplier, fell 2.6 per cent to 283 pence after Britain had to call in the military to beef up the company’s efforts to staff London’s Olympic Games in two week’s time.
G4S said it was experiencing “some delays” in vetting and accrediting the thousands of extra guards needed.
National benchmark indexes fell in 16 of the 18 western European markets. France’s CAC 40 slid 0.7 per cent and Germany’s DAX retreated 0.5 per cent.
US
US STOCKS trimmed losses in early trade as a rally in homebuilders and gains by Procter and Gamble and Merck helped temper concern about a slowdown in global economic growth and American corporate earnings.
PG rallied 4.1 per cent after regulators cleared William Ackman’s Pershing Square Capital Management to buy a stake in the largest consumer-products company.
An SP index of homebuilders jumped 2.5 per cent as PulteGroup and Lennar gained more than 2.8 per cent.
Merck rose 4.5 per cent as the company said it will stop testing an experimental osteoporosis drug because the therapy worked so well. Bank of America and Morgan Stanley slipped more than 1.5 per cent. – (Additional reporting: Bloomberg)
