European shares end flat as boost from ECB rate cut offset by funding concerns for smaller banks

Euro falls 1% to seven-week low against dollar as European Central Bank reduces rates to record low


Stronger-than-expected US economic growth, coupled with a surprise interest rate cut by the European Central Bank, pushed the dollar up and drove down crude oil prices. The ECB’s unexpected move also caused equity markets to retreat after earlier gains.

The euro fell 1 per cent to a more than seven-week low against the dollar after the ECB cut rates to a record low and said it would prime banks with liquidity into 2015 to keep the euro zone’s recovery from stalling as inflation tumbles.
Stocks on the Dublin market took a big jump yesterday after the ECB cut its interest rates, but petered out afterwards, with the Iseq index closing down 29 points. One analyst said the rate cut was quite unexpected “to say the least” and would make life more difficult for the banks. Bank of Ireland ended the day down at 26 cents.

ICG issued a positive interim management statement and announced an increase in passenger and freight carrying capacity on its key Dublin-Holyhead route from mid-December through the addition of a new ship. Stock at the company ultimately ended flat at €25.23.

Smurfit Kappa, which was up at €18.40 at one stage, suffered at the end of the day as markets weakened, finishing down 1.5 per cent at €17.91.
Britain’s benchmark equity index fell for the third straight session yesterday, which traders attributed to a rise in sterling against the euro that could hit UK exporters.

The blue-chip FTSE 100 index closed down by 0.7 per cent, or 44.47 points, underperforming other major European stock markets.

Halfords shares raced ahead as soaring bicycle sales helped it return to profit growth and declare its turnaround on track. The chain topped the FTSE 250 Index with a 14 per cent share surge on a busy day for retail results

Schroders lost 4.4 per cent as Canaccord Genuity cut its rating on the money manager after it reported third-quarter results. Travis Perkins fell 2.5 per cent after UBS offered shares in the builders’ merchant.

Randgold Resources rallied 6.1 per cent after reporting quarterly profit that beat analysts’ estimates.
European shares ended flat yesterday in heavy, volatile trade as a boost from the unexpected rate cut by the European Central Bank was offset by funding concerns for smaller banks.

HeidelbergCement fell 3.8 per cent after saying third-quarter profit fell 7 per cent. Bureau Veritas lost 3.6 per cent as quarterly sales missed analysts’ estimates.

Siemens rose 3.4 per cent after reporting better-than-forecast profit and saying it plans to buy back shares. Swiss Re climbed 1.9 per cent after third- quarter net income exceeded predictions.

The Stoxx Europe 600 Index lost less than 0.1 per cent to 323.23 at the close, paring earlier gains of as much as 1.5 per cent. Germany’s DAX gained 0.4 per cent, while France’s CAC 40 slipped 0.1 per cent.
Frenzied buying in Twitter shares dominated Wall Street’s attention in early trading yesterday, as the social media stock opened well above expectations, while major averages fell, led by the Nasdaq.

The broader market was hurt after weak earnings from Whole Foods and Qualcomm and lacklustre economic figures, including the first read on US third-quarter gross domestic product that was elevated by inventory accumulation.

Twitter soared as much as 92 per cent in its first day of trading on the New York Stock Exchange as investors snapped up shares in the popular microblogging site in a frenzy that recalled the days of the dot-com bubble.

The shares opened at $45.10 a share, up from the initial public offering price of $26 set on Wednesday, then added to those gains, hitting a high of $50 . – (Additional reporting: Bloomberg, Reuters)