European equities suffer worst day since September

Investors concerned over Trump’s ability to deliver stimulus and impeachment prospect

A trader uses his phone outside the New York Stock Exchange  in New York. Photograph: Reuters/Brendan McDermid

A trader uses his phone outside the New York Stock Exchange in New York. Photograph: Reuters/Brendan McDermid

 

European equities suffered their worst day since September as political turmoil in the US pushed investors into safe haven investments following a strong run that sent regional benchmarks to record highs.

Questions over whether obstruction of justice charges could be laid against US president Donald Trump fuelled investor concern over his ability to deliver on aggressive stimulus plans and even raised the possibility Trump could face impeachment.

DUBLIN

The Iseq finished down 1.7 per cent on a rough day for stocks across Europe. The Dublin market was dragged lower by a 4.1 per cent decline for its largest stock, cement-maker CRH. The building materials group, which will lose out should Trump’s stimulus plan not materialise, closed at €32.19, weakening over the course of the session.

Paper and packaging group Smurfit Kappa shed 2.9 per cent to finish at €24.43, while insulation maker Kingspan was down 2.6 per cent at €30.77 and hotels group Dalata lost 2.1 per cent to end at €4.94. Food groups Kerry and Glanbia also finished in the red, while Ryanair was down 0.5 per cent at €16.95.

Drinks group C&C ended at €3.50, down 1.4 per cent on a day in which the cider-maker reported a net loss of €72.9 million for the year to February, wrote down the value of its US business by €129 million and signalled a “cautious” outlook.

Bank of Ireland was flat at just above 24 cent. After the close of markets, the bank announced the appointment of Francesca McDonagh as chief executive. Ms McDonagh joins the bank from HSBC.

LONDON

A nine-day winning streak on the FTSE 100 came to an end, with the index of blue chips turning lower as US political developments weighed on European markets. But although the index slid from the record high hit in the previous session, it still managed to outperform other major European indices, closing down just 0.25 per cent.

CRH, which is dual-listed, and construction equipment rental company Ashtead were among the biggest fallers, while results weighed on British Land, which fell 3.3 per cent after issuing a cautious outlook for the property market due to Brexit uncertainty.

Among miners, Glencore and Anglo American were down 2.2 per cent and 1.1 per cent respectively.

There were a few bright spots, however, with banking stock Lloyds rising 2 per cent after the British government sold off its remaining stake in the lender following its bailout in the 2007-09 global financial crisis.

EUROPE

The pan-European Stoxx 600 fell 1.2 per cent, its biggest one-day loss since the end of September, while euro zone blue chips fell 1.6 per cent, as volatility picked up.

Signs the recent run of gains for European shares has lost steam emerged when Morgan Stanley warned that richly valued European stocks closely geared to economic growth were set for a pull-back.

French electricity producer EDF slumped 5.6 per cent after Green activist Nicolas Hulot was appointed as the minister responsible for environment and energy in the new French government.

The Netherlands’ largest domestic lender ABN Amro fell 4.7 per cent after its results, with traders citing a lower net interest margin and capital ratio.

Ubisoft Entertainment, the third-biggest global entertainment company, fell 3.6 per cent after it cut its mid-term sales forecast.

US

The turmoil engulfing the Trump administration spilled into financial markets as US stocks fell the most since March, measures of volatility spiked higher and Treasuries rallied with gold. The dollar dropped for a sixth day, while Treasury 10-year yields tumbled to 2.25 per cent.

Bank stocks, which outperformed in the post-election rally, were the worst hit. The S&P 500 financial sector sank 2.5 per cent, led by losses in Bank of America and JPMorgan. Goldman Sachs was the biggest drag among the 25 decliners on the Dow Jones.

Additional reporting:

Reuters/Bloomberg