Markets drift on sluggish trading day

QUIET TRADE and low volumes sent markets drifting yesterday, eroding gains made during Tuesday’s rally.

The generally sluggish trade was partly down to the fact that just eight markets in western Europe were open yesterday.

Volumes in stocks listed on Europe’s Stoxx 600 index were 53 per cent down on the average turnover for the previous 30 days.

Mining stocks suffered the most as investors decided that the outlook for the global economy, and thus demand for resources, remained poor.

Otherwise, the day was marked by poor manufacturing data from New York, which left analysts speculating that the US Federal Reserve would embark on a new stimulus programme.

DUBLIN

TRADE IN Dublin was “very quiet” dealers said, with generally small numbers of shares changing hands.

United Drug, which earlier this week flagged that it was considering moving its listing to London, was the biggest mover again yesterday.

The drug and healthcare products distributor surged 4.35 per cent to close at €2.40, adding to Tuesday’s 4.6 per cent gain.

Index heavyweight, international building materials group CRH, which accounts for up to one third of the Iseq, fell for the second day in a row, shedding 2.52 per cent to close at €14.31.

Analysts generally downgraded earning forecasts for the stock yesterday following its interim results release on Tuesday.

In a related sector, insulation specialist Kingspan also took a hit, dropping 3.68 per cent to close at €6.80.

The stock has had a good run since it announced two acquisitions last week, and traders said there was an element of profit-taking in yesterday’s fall.

Elsewhere, drinks group, CC had a good day, adding 2.49 per cent to close at €3.413, while distribution specialist DCC climbed 1.23 per cent to €20.60.

LONDON

BRITAIN’S TOP share index fell on Wednesday in sluggish volumes as weakness in index heavyweights such as miners, tobaccos and Vodafone outstripped gains in financials.

ENRC shed 8.5 per cent to 379.6 pence, topping the list of FTSE 100 fallers, after the Kazakh miner reported first-half profit had plunged 41 per cent and announced it was cutting spending and its dividend.

Vodafone fell 1 per cent to 188.75 pence after Bank of America cut the world’s second-biggest mobile phone company to neutral, the equivalent of hold, from buy.

Rio Tinto lost 3.4 percent to 3,038 pence, while BHP Billiton fell 2.3 per cent to 1,936.5 pence.

Imperial Tobacco Group lost 1.7 per cent to 2,489 pence. Australia will become the first country to require cigarettes to be sold in uniform packages after its top court rejected a challenge from tobacco companies, setting a precedent for other nations to follow.

The Australian high court dismissed claims by companies, including Imperial Tobacco, that the government illegally seized their intellectual property by barring the display of trademarks on packs.

British American Tobacco, which generates 10 per cent of sales in Australia, was down 1.7 per cent.

Standard Chartered increased 4.1 per cent to 1,426.5 pence, as it settled a New York money-laundering probe for $340 million, a day before the bank was to appear at a hearing to defend its right to continue operating in the state. It still faces federal investigations over allegations it helped Iran to funnel money through the US.

EUROPE

THE STOXX 600 lost 0.1 per cent to 270.35 at the close of trading.

Royal KPN NV, the Dutch phone company partly controlled by Carlos Slim’s America Movil SAB, lost 1.3 per cent to €6.57 after it halted the sale of its Belgian mobile phone unit Base, saying the non-binding offers it received were “unsatisfactory”.

Nokia Oyj rallied 3.4 per cent to €2.08. Reuters reported the company will keep Windows as its smart phone platform, citing chief executive Stephen Elop.

European stocks have rallied for the past 10 weeks amid better-than-expected company earnings and speculation policymakers will do more to stimulate the economy.

US

US STOCKS spent another session in a tight range yesterday day, with the SP 500 ending a few points higher and extending a rally that seems to be happening in slow motion.

The benchmark SP 500 index finished just a hair away from its highest close in three months, up 0.11 per cent at 1,405.53, as investors weighed manufacturing data for clues on whether the Federal Reserve will act to stimulate the economy.

The Dow Jones Industrial Average lost 0.06 per cent to 13,164.78.

Shares of Deere Co lost 6.3 per cent to $75.10 after the worlds largest agricultural equipment maker reported a lower-than-expected quarterly profit –(Additional reporting: Bloomberg, Reuters)