European markets steady but Evergrande continues to weigh

Heavyweight stocks drag down Iseq in Dublin but leisure stocks make small recovery

Shares in luxury goods and Birkin bag maker Hermès rose 1.41 per cent to €1,328 after it reported strong quarterly sales. Photograph: Romeo Gacad/AFP via Getty

Shares in luxury goods and Birkin bag maker Hermès rose 1.41 per cent to €1,328 after it reported strong quarterly sales. Photograph: Romeo Gacad/AFP via Getty

 

European markets steadied on Thursday as mining stocks fell on property developer China Evergrande’s woes.

DUBLIN

A difficult day for Dublin’s heavyweight stocks dragged the overall market down.

Building materials giant CRH slipped 1.69 per cent to €40.65. Kingspan fell 1.7 per cent to €93.60, giving up some of the gains made during positive moves over previous days.

Packaging multinational Smurfit Kappa shed 2.42 per cent to finish at €42.74. Dealers say investors are concerned that the group may not be able to pass on raw material price rises to customers.

Ryanair ended the day 0.74 per cent down at €16, although dealers said it gained ground earlier.

Among smaller stocks, hotelier Dalata advanced 1.56 per cent to €3.915. Traders noted that leisure stocks recovered somewhat after a poor few days.

AIB shed 1.27 per cent to €2.34 while its peer Bank of Ireland was 1.17 per cent down at €5.05.

LONDON

Rising fears that heavily indebted property developer China Evergrande’s problems will infect the eastern giant’s resource-hungry economy sent miners’ shares plummeting on Thursday.

Anglo American shed 2.66 per cent to close at 2,762.5p, despite reporting an increase in production.

Rio Tinto tumbled 4.84 per cent to 4,649p, BHP slid 3.72 per cent to 1,928.4p while Glencore was 2.5 per cent off at 368.55p.

Evergrande has until Monday to pay $83.5 million due on some of its bonds. Failure to do so will trigger a default.

Investors worry that its failure will reverberate through the Chinese economy and the country’s debt-laden property developers.

London’s blue chip FTSE 100 index ended 0.5 per cent lower thanks to the miners’ weakness, Brexit jitters and rising Covid infections. Resource companies alone slipped 3.5 per cent.

Consumer goods giant Unilever, maker of Magnum ice creams and Domestos bleach, gained 1.2 per cent to 3,863.5p.

The group beat its third-quarter sales growth forecast and maintained its full-year profit margin outlook. However, its finance chief warned of even higher inflation next year.

Engineering firm Renishaw rose 11.7 per cent to the top of London’s mid-cap index after reporting a near-146 per cent rise in profit.

EUROPE

Europe’s most valuable tech company SAP dropped 3.2 per cent to €119.86 – making it the biggest drag on the Stoxx 600 – despite despite positive third-quarter results.

Traders were unimpressed by the company’s outlook, particularly its licensing forecast.

Swiss engineering and tech group ABB tumbled 6.2 per cent to 30.10 Swiss francs after it lowered its full-year sales forecast and warned of shortages of components.

Nordic Semiconductor plunged 12.4 per cent to 247 Norwegian kroner after its core earnings fell slightly year-on-year and the company warned of rising costs.

Sweden’s AB Volvo fell about 0.4 per cent after it said chip shortages hampered production of its trucks.

European banks were 0.4 per cent down overall despite positive earnings news from Barclays and Finland’s Nordea.

Shares in luxury goods and Birkin bag maker Hermès rose 1.41 per cent to €1,328 after it reported strong quarterly sales.

NEW YORK

Tech giant IBM tumbled 8.2 per cent in early trade after it missed market estimates for quarterly revenue as its managed infrastructure business suffered from a decline in orders.

Its fall dragged the S&P 500 lower, but the tech-heavy Nasdaq gained as investors once again backed high-growth stocks.

Tesla erased early declines to rise 3 per cent as investors digested the electric vehicle maker’s upbeat earnings, despite the company warning of supply-chain hurdles.

Other growth stocks including Facebook, Microsoft and Amazon were higher by early afternoon trading.

Data showed the number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labour market, though a shortage of workers could keep the pace of hiring moderate in October.

– Additional reporting: Reuters