European stocks down to one month low

Concern that impasse over the US budget and debt limit may lead to a default

Deadlock in Washington was the main topic on the floors of stock markets yesterday, prompting investors to mark time and wait to see what happens.

The Iseq closed the day at 4,195.87, a fall of 0.67 per cent, a type of result that was echoed across Europe as well as on the far side of the Atlantic.

Volumes were light on the Dublin exchange. Smurfit Kappa fell by 2.73 per cent, to €16.55 in a shift that traders said was the result of a lack of buyers in the market. A similar situation arose with a 4.03 per cent fall in the price of FBD, to €13.56.

There was interest yesterday in Kingspan, the result, traders said, of a roadshow that has convinced some buyers. The stock closed at €12.50, a rise of 2 per cent. C&C closed up 0.21 per cent, at €4.28. Traders said buyers believe the stock is cheap relative to its peers, despite some concern at the company's move into the US market.

CRH closed down 1.59 per cent, at €17, while Bank of Ireland closed the day unchanged.

London's blue chip share index suffered further falls despite a rally among housebuilders and property-related stocks amid hopes of a boom in Britain's housing market.


A bullish note from US investment bank Goldman Sachs sparked share gains for developers, mortgage firms and DIY groups after it upgraded a raft of firms on the back of the government’s Help to Buy scheme and recent encouraging economic data.

The pound fell sharply against the US dollar after overall industrial production fell 1.1 per cent in its biggest monthly decline for nearly a year. Sterling dropped nearly 1 per cent to $1.59 and 0.4 to €1.18.

Beneficiaries from the house market optimism included mortgage lender Lloyds Banking Group, which rose 0.4p to 72.9p and B&Q owner Kingfisher after a gain of 3.6p to 364.8p.

Wickes owner Travis Perkins was 8p higher at 1586p, while estate agency business Countrywide improved 10p to 550p in the second tier.

In corporate news, struggling bakery chain Greggs was lifted by a trading update showing a major revamp had helped stem a fall in sales, with the like-for-like decline narrowing to 0.5 per cent in the third quarter. Shares in the FTSE 250-listed company were up 3 per cent, or 11.1p, to 438.4p.

European stocks declined to a one-month low amid concern that the impasse over the US budget and debt limit may lead to a default.

The Stoxx Europe 600 Index slipped 0.6 per cent to 305.13 at the close of trading, for a third day of losses. The benchmark has fallen 1.5 per cent this week. France’s CAC 40 fell 0.2 per cent and Germany’s DAX lost 0.5 per cent.

French telecoms giant Alcatel said it will eliminate 10,000 jobs as chief executive Michel Combes accelerates a €1 billion-euro cost-cut plan to revive the unprofitable company.

Saint-Gobain dropped 3.7 per cent to €36.87. Morgan Stanley cut its rating on the stock to underweight, similar to a sell recommendation, from equal weight, saying it doesn't see a recovery yet in the European building industry and the contribution from emerging markets will slow.

US stocks fluctuated, after the benchmark index's biggest two-day decline since June, as a report that Janet Yellen was picked to lead the Federal Reserve offset concern that the debt impasse will harm the economy. Yum! Brands sank 8.2 per cent after third-quarter income fell 68 per cent on lower same-store sales in China. The owner of the KFC fast-food chain cut its 2013 earnings forecast as third-quarter earnings trailed analysts' estimates.

Netflix, which is still more than three times higher than where it started in 2013, plunged 4.6 per cent to $288.51 while TripAdvisor slipped 1.7 per cent to $70.48, paring its gain this year to 68 per cent. – (Additional reporting, Press Association, Bloomberg)

Colm Keena

Colm Keena

Colm Keena is an Irish Times journalist. He was previously legal-affairs correspondent and public-affairs correspondent