Stocks decline from 15-month high

EUROPEAN STOCKS declined from a 15-month high as concern about a deepening economic slowdown in China overshadowed optimism from the Federal Reserve’s third round of quantitative easing announced late last week.

Meanwhile, Spanish bond yields edged up past 6 per cent, reflecting investor concern that the Spanish government will hold back from an aid request that may include debt purchases by the European Central Bank.

DUBLIN

THE ISEQ finished almost a half a per cent lower, in line with its European peers. Volumes were slightly lighter than the end of last week.

In terms of stock-specific news, news that the court had approved a rescue plan for Atlantic Homecare failed to lift Grafton’s shareprice, with the stock finishing down 1.5 per cent at just under €3.40. However, the outcome of today’s court hearing had been expected.

Origin Enterprises was down ahead of full-year results tomorrow, though ESM-listed Continental Framers, in which it has a stake, reported a doubling of its pre-tax profits to €3.5 million in the first half of the year.

NCB also upgraded Origin yesterday to “buy”. Nonetheless, its share price closed off 2.7 per cent at €4.10. Continental Farmers Group closed up 5 per cent at €0.315.

Meanwhile, Aryzta, which owns 74 per cent of Origin, advanced 1.4 per cent to €40.80 ahead of its full-year results next Monday.

Paddy Power had a good day, reaching above the €56 mark at one stage, though closing at €55.15, an advance of 1.7 per cent. Its strong performance reflected a buoyancy among gaming stocks in Britain.

LONDON

BRITISH STOCKS declined following a two-day rally, on deepening concern that the economic slowdown in China will worsen.

There was some activity among energy and mining stocks. Ophir Energy tumbled 6.2 per cent after newspapers reported that the board of Tanzania Petroleum Development has to review its agreements with foreign energy companies.

Aquarius Platinum, a platinum producer in South Africa, surged 8.3 per cent to 52.9 pence. The company said mining resumed this morning at its Kroondal facility. Aquarius suspended production on September 14th following protests.

Meanwhile, Vodafone, which has resisted setting aside money for a $2.2 billion tax bill in India, fell 0.9 per cent to 174.2 pence after saying it may make a provision to cover legal risks.

BT slid 1.6 per cent to 229.2 pence after Exane BNP Paribas cut its recommendation on the shares to neutral from outperform.

The brokerage said that Britain’s largest fixed-line phone provider will need 3.7 million customers to pay £10 a month to cover the £280 million ($455 million) charge for televising football plus production costs.

EUROPE

EUROPEAN STOCKS declined from a 15-month high amid increasing concern about China’s economy. Citigroup cut its growth forecast for the Chinese economy to 7.6 per cent in 2013 from 8 per cent because of weakening external demand.

National benchmark indexes fell in all of the 18 western European markets. Germanys Dax slipped 0.2 per cent, the UKs FTSE 100 declined 0.4 per cent, while Frances Cac 40 dropped 0.8 per cent.

SSAB sank 6.6 per cent as the Swedish steelmaker said demand for strip products has been much weaker than expected.

ThyssenKrupp, Germany’s biggest steelmaker, slid 4.6 per cent to €17.63 after UBS downgraded the stock to sell from neutral.

Hennes and Mauritz (HM) slid 1.8 per cent after third-quarter sales missed estimates.

Celesio, Europe’s largest drug wholesaler, slumped 4.6 per cent to €14.11 as an analyst at Exane BNP Paribas reduced his price estimate for the stock because cuts in UK government reimbursement may lower profits.

NEW YORK

US STOCK markets were heading for a lower close, as a Federal Reserve report showed that manufacturing in the New York area shrank more than forecast.

Wall Street had closed at its highest level in nearly five years on Friday following the announcement by the US Federal Reserve that it would pump $40 billion a month into the economy until the jobs market improves.

The high close contributed in part to the losses yesterday.

Cliffs Natural Resources, Vulcan Materials, and Netflix led declines on the SP500.

However, Apple was trading higher for the fourth successive day, as pre-orders of its iPhone 5 topped two million units in one day, more than double the sales record set by the previous model of the device.

– (Additional Reporting : Bloomberg/Reuters)