European and US equities weaken after strong month

It was a good day for banks on stock markets Wednesday but not good enough to offset weakness in commodity and energy stocks. Markets across Europe and in the US took a step back at the end of what has been a strong month for equities.

DUBLIN

The news that builders merchant

Grafton

is having to restructure its UK operations seemed to affect rival

Kingspan

, which gave up more than 3 per cent on Wednesday to close on €24.58.

Ryanair also stumbled after comments by chief executive Michael O'Leary that it might yet have to reduce it guidance of the full year as ticket sales fall. The sales closed 1.56 per cent down on €11.99.

Elsewhere Datalex, down over 4 per cent at €3.28, and Irish Continental, 1.67 per cent weaker on €4.72, slipped back after reporting interim figures.

LONDON

UK shares were hit by a late slump in the energy sector, although the FTSE 100 posted its third monthly gain in a row. The blue chip index closed down 39.28 points, or 0.6 percent, at 6,781.51 points, slightly underperforming the broader European market. But the index ended the month up 0.8 percent, and has risen 6 of the last 7 months. The FTSE 100 is 7 per cent above its pre-Brexit level, helped by a fall in sterling. The FTSE 250 – more representative of the UK economy, has also recovered, up 2.3 per cent since Britain’s June 23rd vote to leave the European Union.

However, that cheer did not spread as far as Irish builders merchants Grafton. The UK-listed group shed close to 10 per cent of its value after reporting underwhelming figures on the back of a difficult UK trading environment.

Strong house price data buoyed housebuilder Berkeley Group , which was the top gainer in the FTSE 100 with a 3 per cent rise on the day when it learned that it was to be dropped from the index.

Outside the blue chips, Restaurant Group – now run by former Paddy Power chief executive Andy McCue – dropped 5.9 per cent after Citigroup cut its rating on the stock to "sell".

EUROPE

European stocks fell as declines in commodity and energy producers outweighed the best month for banks in more than a year. Miners posted their lowest levels since July 8th, and oil companies slid after data showed a bigger-than-expected increase in US crude inventories.

Commerzbank and Deutsche Bank rose at least 2.5 per cent after Manager Magazin reported Deutsche Bank considered a potential merger.

Greek lenders pushed the ASE Index to the best performance among western European markets after Piraeus Bank and Alpha Bank released earnings.

The Stoxx Europe 600 Index lost 0.4 per cent at the close of trading, erasing gains of as much as 0.4 per cent after the oil data, and paring its monthly advance to 0.5 per cent.

BHP Billiton and Rio Tinto led declines among commodity producers.

NEW YORK

Wall Street was down, with the benchmark S&P 500 index marking its biggest decline in four weeks, as a sharp drop in oil prices weighed on energy stocks. The S&P 500 energy index plunged 1.67 per cent, making it the biggest faller among the 10 major S&P 500 indexes.

Exxon Mobil

fell 1.1 per cent and was the top drag on the S&P while

Chevron’s

1.6 per cent decline had a similar effect on the Dow.

Investors are also looking at the upcoming US nonfarm payrolls data tomorrow which could provide clues on the timing of the next interest rate hike.

At 12:33pm ET, the Dow Jones industrial average was down 117.38 points, or 0.64 per cent, at 18,336.92. The S&P 500 was down 14.53 points, or 0.67 per cent, at 2,161.59. The Nasdaq Composite was down 30.92 points, or 0.59 per cent, at 5,192.07. The S&P 500 is on track to mark its sixth straight month of gains and the Dow its fifth month.

– Additional reporting Reuters