WORRIES ABOUT the health of the global economy and its impact on corporate earnings are again affecting investor sentiment, with selling pressure building on equity benchmarks as Europe closed and New York entered the afternoon session.
The FTSE All-World index is down 0.6 per cent as the FTSE Eurofirst 300 posts a loss of 0.5 per cent. Wall Street’s SP 500 is now down 0.6 per cent and at its low for the session, after its 1 per cent slide on Tuesday.
DUBLIN
WITH MOST of the heavyweights losing ground, the ISEQ did well to keep its losses to 0.8 per cent, finishing the session at 3,240.98.
The steady stream of good news from explorer Providence saw it advance again, climbing 25 cent to close at €8.75, up 2.9 per cent.
Index heavyweight CRH shed 2.1 per cent to close at €13.88 on a day other constructions stocks also struggled with Kingspan and Grafton both giving ground – close to 1 per cent each.
Ryanair, also one of the stocks generally more heavily traded, was a fraction under 1 per cent ahead on €4.54.
LONDON
BAE FELL 1.4 per cent to 320.9 pence after the arms company and Franco-German rival confirmed they are no longer pursuing a merger. EADS jumped 5.3 per cent to €27.48.
Imagination Technologies tumbled 9.4 per cent to 455.5 pence for the biggest decline in the Euro Stoxx 600. Credit Suisse started coverage of the UK chip designer with an underperform rating, similar to a sell recommendation.
Capita fell 1.8 per cent to 727 pence as RBC Capital Markets downgraded the supplier of services for the British army.
Man Group rose 3.8 per cent to 93.4 pence, the highest price in five months, after a media report that BlackRock may buy the company.
Royal Bank of Scotland advanced 2.1 per cent to 262.7 pence after agreeing to sell two buildings in Frankfurt and Berlin to Axa Investment Managers in the biggest German commercial real estate transaction this year, according to two people with knowledge of the matter.
Lloyds Banking Group, the UK’s second-biggest government-aided bank, gained 4 per cent to 38.48 pence as it emerged that US investment firms Lone Star Funds and Kennedy-Wilson Holdings are among remaining bidders for parts of about €2 billion of mainly Irish real estate loans Lloyds Banking Group Plc is selling.
EUROPE
EUROPEAN STOCKS declined for a third day as investors speculated that economic fundamentals don’t justify current stock valuations.
The Stoxx Europe 600 Index dropped 0.6 per cent to 268.71 at the close of trading. The benchmark gauge has still surged 15 per cent from this year’s low on June 4th.
The IMF said European banks may need to sell as much as $4.5 trillion of assets through 2013 if policy makers fail to implement fiscal tightening or set up a single supervisory system in time.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 slipped 0.6 per cent, while Germany’s Dax retreated 0.4 per cent and France’s Cac 40 declined 0.5 per cent. AB InBev dropped 1.2 per cent to 67.31 euros after reports that the US Department of Justice may want to block the company’s purchase of Mexico’s Modelo, which brews Corona beer.
NEW YORK
US WHOLESALE retailer Costco enjoyed gains after it said increasing revenues from membership fees helped boost its quarterly results.
Shares in the company, which sells products in bulk at discount prices to its members, rose 3.7 per cent to $103.30 by midday in New York. An extra week of sales aided membership fees, analysts said, which grew by 17.6 per cent to $694m in the quarter compared with the same time a year ago, which did not include the extra week.
Alcoa shares dropped sharply after the aluminium group said late on Tuesday that global demand for the commodity was slackening due to a slowdown in China. Alcoa kicked off the quarterly reporting season with results came in slightly ahead of market expectations, but the mild beat was tempered by its expectations of continued weakness from China for the rest of the year.
Shares in the company were 4.3 per cent lower at $8.74 and ranked among the day’s worst performing stocks.
The benchmark US index, which has risen 14.1 per cent since the start of the year, had declined for three straight sessions heading into yesterday.
After having recorded a strong run during the third quarter, oil refiners, such as Valero Energy, which lost 5.9 per cent to $29.54, gave up some of their gains. Marathon Petroleum , another refiner, dropped 3.6 per cent to $55.03, while Tesoro declined 6.4 per cent to $38.36.
Facebook lost 2.4 per cent to $19.75, falling to its lowest level since last month. – (Additional reporting Bloomberg/Reuters/ Financial Times Limited 2012)
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