Summit fails to boost Europe markets

HAVING RISEN to their highest level since 2010 on Thursday, European stocks fell and the euro declined against the dollar after Spanish prime minister Mariano Rajoy, speaking on the fringes of the EU summit, said his nation doesn’t feel under any pressure to ask for a bailout, fuelling concern the debt crisis could be prolonged.

DUBLIN

THE ISEQ index finished off down half a per cent yesterday, broadly in line with its European peers. The market drifted for most of the day according to traders, as the EU summit failed to deliver any boosts for the market. Activity was quiet for most of the session, with the US opening failing to generate any direction.

Food ingredients company, Kerry Group, was one of the strongest performers of the day, advancing 2 per cent to €40.02. Other food-related stocks advanced.

Drinks company C&C added 2 per cent to finish at €3.74 after a low close on Thursday. The drinks company reports interim results next Tuesday.

Glanbia, which will hold the first of its votes on the proposed spin-off of its Dairy Ireland business into a joint venture with Glanbia co-op next month, added half a per cent to finish the week at €7.30.

Building materials company CRH had a relatively weak day, though this followed advances in the previous two trading sessions, shedding 2.5 per cent to close at €13.99. Other construction-related stocks retreated. Grafton Group lost 3.5 per cent to €3.33, while Kingspan slipped by 2.7 per cent to finish at €8.16.

LONDON

BRITISH STOCKS declined as the conclusions of the summit disappointed, with the FTSE 100 losing half a per cent at the close.

Banks were among the main movers. Lloyds lost 3.3 per cent after JPMorgan Chase downgraded the shares. Barclays slid 2.9 per cent to 233.85 pence, while Royal Bank of Scotland declined 2.1 per cent to 281 pence.

Redrow slid 3.8 per cent after a group led by chairman Steve Morgan ended takeover talks with the company.

Instruments group Spectris jumped the most in almost 20 months after saying it will meet full-year forecasts. Reported sales rose 12 per cent in the last quarter, it said in an interim statement.

Burberry advanced 0.7 per cent to 1,188 pence after Investec asked investors to buy the shares, upgrading them from hold.

EUROPE

EUROPEAN STOCKS fell, snapping four days of gains on the failure of European Union leaders to discuss further aid for Spain. Banks contributed most to the drop in the Stoxx Europe 600 Index, which slipped 0.8 per cent to 273.85 at the close in London.

Banking stocks were particularly hit. Bankia led lenders lower, losing 14 per cent while Banco Popular was down 5.3 per cent. A fall in leading lender Santander also took the most points off Spain’s Ibex which was 2.3 per cent weaker.

German stocks fell for the first time in five days, with the Dax Index dropping 0.8 per cent to 7,380.64 at the close of trade, though it still ended the week with a 2.1 per cent increase.

Bayer, Germany’s largest pharmaceuticals firm, slipped 0.9 per cent after UBS analysts predicted demand weakness at the company’s material science unit.

SMA Solar Technology tumbled 31 per cent after saying subsidy cuts in Europe will reduce sales.

Industrial electrics group Aggreko fell 7.4 per cent after it said bad-debt provisions would hurt full-year results.

French supermarket giant Carrefour advanced 5.7 per cent after it agreed to sell its Colombian unit.

US

US STOCKS fell, trimming a weekly advance for the Standard Poor’s 500 Index, as Microsoft and General Electric posted sales that missed estimates.

Microsoft retreated 2.5 per cent to $28.76 by lunchtime after reporting a 22 per cent drop in fiscal first-quarter net income to $4.47 billion, or 53 cents a share, amid declining sales of Windows, its operating system.

McDonald’s dropped sharply after it reported a 3.5 per cent fall in third-quarter profit.

Google’s share price continued to falter following the premature release of results on Thursday which showed surprisingly weak results.

US manufacturer Honeywell was a bright spot on Wall Street, advancing through the session after it reported a 10 per cent jump in quarterly earnings as declining natural gas prices helped increase profit at its UOP chemical arm, offsetting weakness in Europe.

Unemployment data showed the jobless rate had dropped in seven out of nine battleground states that will decide the presidential election, bolstering President Barack Obama’s position on the economy as he heads into the final two and a half weeks of campaigning. – (Additional Reporting: Bloomberg)