European and US stocks sink on growth jitters

Markets dragged down by travel shares as fears about Ebola hit companies in sector

Travel stocks fall on fears over spread of the Ebola virus. Photograph: Ahmed Jallanzo/EPA

Travel stocks fall on fears over spread of the Ebola virus. Photograph: Ahmed Jallanzo/EPA

 

in huge trading volumes, extending their week-long selloff as concerns about global economic growth spooked investors.

In the latest evidence of economic malaise, China’s services sector growth weakened last month as new business cooled, another sign the world’s second largest economy may be slowing. The figures came a day after German industrial output fell much further than forecast. DUBLIN The Iseq index fell 1.53 per cent to 4,619.91, dragged down in part by travel stocks as fears about Ebola hit most companies in the sector in Europe. Ryanair was down 1.75 per cent to €7.04, Aer Lingus was down 2.88 per cent to €1.35, and Irish Continental Group was down 1.52 per cent to €2.85. Datalex, a travel software firm, was also down, losing 2.55 per cent to €1.53.

Bank of Ireland was among the biggest fallers, down 4.03 per cent to 29 cent, as investors mulled the impact of new Central Bank rules designed to dampen property price rises.

UTV Media, which is hiring its new team in Dublin, closed unchanged at €2.60. Independent News & Media was down 2.74 per cent at 14 cent.

Among the few stocks gaining was Dalata Hotel Group, which closed up 1.72 per cent at €2.95. Kerry Group rose 1.5 per cent to €54.30. LONDON Blue-chip shares endured another dismal session. Weaker travel stocks were also a factor in the performance of the FTSE 100, which is now close to its low for the year.

International Airlines Group – which owns British Airways as well as Spain’s Iberia and Vueling – had tumbled 7 per cent in the previous session and was down another 2.3p to 343.3p.

Among other travel stocks, EasyJet dropped 11p to 1378p, TUI Travel eased 15p to 367p and cruise ship firm Carnival slipped 29p to 2299p.

On a brighter note Tesco’s beleaguered shares rallied after brokers at HSBC upped their rating because many of the negatives surrounding the company are now factored into the share price after a 52 per cent slump in the last year. The stock jumped 3 per cent before settling 1 per cent or 2.5p higher at 185.1p.

Rival Morrisons added 0.8p to 160.1p, and Sainsbury’s dipped 3.5p to 226.7p.

Among the biggest fallers on the FTSE 100 was Tullow Oil, down 24.5p at 576p. EUROPE Germany’s DAX index and France’s CAC 40 both lost 1 per cent. The euro zone’s blue-chip Euro STOXX 50 index fell 0.9 per cent to 3,053.31.

Shares in German business software maker SAP featured among the top losers, down 3.9 per cent. Traders cited speculation about weak orders in the fourth quarter and an internal memo in which the firm’s finance chief urged staff to cuts costs.

Jitters over the spread of Ebola also hurt sentiment, with shares in airlines and travel companies losing ground.

Air France-KLM, which yesterday said the total cost of last month’s two-week strike by pilots was €500 million, shed 2.5 per cent. NEW YORK US stocks fluctuated as energy shares tumbled with the price of oil before the Federal Reserve releases minutes from its latest meeting.

Sears Holdings dropped 14 per cent after people with knowledge of the matter said a vendor was halting shipments.

Halliburton sank 4.5 per cent to lead energy stocks lower as US crude touched a 17-month low. Costco Wholesale gained 1.8 per cent after saying profit topped forecasts.

Merck and UnitedHealth Group added 1.2 per cent to pace gains in the Dow Jones Industrial Average.

“Investors are cautious and that’s why you’re seeing the grind back and forth today,” said Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors. – (Additional reporting: Bloomberg, Reuters)