Escalating trade dispute prompts global sell-off

Iseq benchmark index fell 1.57 per cent, outperforming European markets

Increasing trade war rhetoric shook global markets on Monday. Photograph: Lucy Nicholson/Reuters

Increasing trade war rhetoric shook global markets on Monday. Photograph: Lucy Nicholson/Reuters

 

Global markets reversed many of last week’s gains as concerns surrounding a trade war between the US and China resurfaced.

Ireland’s benchmark Iseq overall index fell 1.57 per cent, pushed lower by heavyweight CRH while food group Aryzta was the biggest loser on the day. Both companies have significant US exposure.

Across Europe, the picture was broadly similar with the pan-European Stoxx 600 falling 2.02 per cent and the FTSE 100 down 2.24 per cent.

Elsewhere a sell-off in Turkish assets accelerated on the back of Sunday’s election win for Tayyip Erdogan. Turkish equities are now down in excess of 17 per cent for the year.

In Argentina, meanwhile, a strike over President Mauricio Macri’s economic policies brought the country to a standstill, freezing grain exports and halting banking and public transit.

Dublin

The Iseq overall index fell 1.57 per cent on Monday, dragged lower by a poor performance from CRH and significant movement in financials.

Building materials giant CRH dropped 3.22 per cent to €30.10 after being told by the US justice department to divest Rocky Gap quarry as a condition of its planned acquisition of privately held Pounding Mill Quarry.

Pillar bank AIB was the most heavily traded stock of the session, ultimately to its downfall. The bank fell 4.43 per cent to €4.664. There was also significant movement in Bank of Ireland, with over 5.18 million shares traded, and it dropped 1.73 per cent to €6.83.

Baking company Aryzta was the biggest faller on the day, down 5.38 per cent to €13.52, albeit on light volume on the Irish bourse. The fall was less pronounced on its Swiss listing, ultimately down 4.2 per cent, where significantly higher volume was traded.

London

British shares retreated in pace with other European stock markets on Monday with Micro Focus suffering with a 5.21 per cent fall as Europe’s tech sector took a hit from the trade spat.

Financials were the biggest drag for the index with HSBC , Prudential and Lloyds down 2.58 per cent, 3.86 per cent and 1.42 per cent respectively.

Heavyweights BP and Royal Dutch Shell were down 3.4 per cent and 3.08 per cent as oil prices gave back gains made on Friday following an output agreement between major oil exporters.

Among smaller stocks, Britain’s largest estate agent Countrywide tumbled almost 30 per cent after it lowered its half-year adjusted core earnings forecast, citing a sluggish market, and said it plans to issue more equity to cut debt.

British serviced office provider IWG jumped 3.25 per cent after it said it was evaluating a possible cash offer from private equity firm Terra Firma.

Europe

Bank stocks, highly sensitive to economic turmoil, were the worst-performing with Commerzbank bottom of the DAX while Santander and BNP Paribas led Europe-wide falls.

Industrials, which need unfettered access to markets, were also selling off. Airbus, ABB and Siemens were among biggest drags on the STOXX. Italian cable maker Prysmian fell 10 per cent, amongst the biggest losers on the STOXX, at the open after it cut its guidance due to additional expected costs related to issues with its UK WesternLink undersea cable project.

Among stand-out gainers, Danish medical equipment maker Ambu jumped 6.55 per cent to the top of the STOXX after JP Morgan started coverage of it with an “overweight” rating.

New York

US technology stocks were most impacted by ongoing trade rhetoric, with the S&P technology index falling 2 per cent.

Harley-Davidson tumbled after the motorcycle maker forecast additional costs due to European Union tariffs.

Eight of the 11 major S&P sectors were lower, with gains only in defensive utilities, consumer staples and telecoms.

Campbell Soup was the biggest percentage gainer on the S&P 500, rising after a New York Post report that Kraft Heinz was considering buying the company.

– Additional reporting: Reuters