European shares decline on Paris incident and North Korea worries

Dublin closes lower, with Permanent TSB and Smurfit among the weakest stocks

Permanent TSB, whose share prices has been in the doldrums in recent weeks, ended the day down 2.6%  at €1.85. Photograph: Nick Bradshaw

Permanent TSB, whose share prices has been in the doldrums in recent weeks, ended the day down 2.6% at €1.85. Photograph: Nick Bradshaw

 

European shares fell back on Wednesday as geopolitical tensions sent all major benchmarks into negative territory, accompanied by a slight uptick in volatility in what is typically a quiet period of summer trading for the market.

Risky assets were hit globally after North Korea said it was considering plans to attack Guam, which has a large US military base.

DUBLIN

The Dublin market followed other European indices lower, closing down 51.68 points to 6.623.77.

Permanent TSB, whose share prices has been in the doldrums in recent weeks, ended the day down 2.6 per cent at €1.85. AIB was flat at €4.88, while Bank of Ireland was nearly 1 per cent lower at €7.03.

Paddy Power, which this week confirmed the departure of chief executive Breon Corcoran and announced a 9 per cent jump in first-half revenues to £827 million (€915m), was higher, rising 0.7 per cent to €80.78.

Ires Reit was unchanged after reporting a 25 per cent jump in profits to €33.3 million in the first six months of the year. It closed at €1.38.

Smurfit Kappa remained weak, ending the day down 2 per cent to €24.08.

LONDON

Britain’s top share index was shaken from its summer lull on Wednesday as geopolitical tensions hit equity markets globally, sending investors into safe-havens such as gold mining stocks, while an earnings update weighed on shares in G4S. Britain’s blue chip FTSE 100 index ended the session down 0.6 per cent at 7,498.06, broadly in line with a negative European market.

Shares in precious metals miners Fresnillo and Randgold Resources topped the index, gaining nearly 5 per cent and 2.8 per cent respectively, as investors fled to safe-haven assets on worries over tensions between the US and North Korea.

Disappointing second-quarter revenue growth hit shares in security services firm G4S, which sank 7.5 per cent and marked its worst day since March 2016. The shares had gained around 40 per cent this year ahead of the earnings release.

Shares in Ladbrokes Coral helped bring up the rear, dropping more than 5 per cent as top shareholders sold their shares in the betting firm, while Essentra dropped 5.4 per cent after broker Numis cut its rating on the stock to “hold” from “add”.

EUROPE

On a day which also marked 10 years since the start of the global financial crisis, the pan-European STOXX 600 ended the session 0.7 per cent lower, while euro zone stocks and blue-chips dropped more than 1 per cent. France’s CAC40 fell 1.4 per cent after a car hit a group of soldiers in a Parisian suburb in what was said to be a deliberate act, while Germany’s DAX was down 1.1 per cent as bond yields fell.

Scout24 jumped 4.7 per cent to a seven-month high after the German online classifieds company said it had won back customers in the second quarter. Its shares had fallen sharply after a broker downgrade last week.

Chemicals group Brenntag dropped 6.7 per cent after second-quarter results undershot expectations.

Meanwhile, the world’s top maker of diabetes drugs, Novo Nordisk, was up 7.9 per cent after beating profit forecasts.

WALL STREET

US stocks were lower in early trading as investors scurried to safe-haven assets after President Donald Trump’s “fire and fury” warning to North Korea escalated tensions with the nuclear-armed nation.

Shares of Dow component Walt Disney were down 4.44 per cent as investors doubted whether it can succeed with its plan to launch its own streaming services rather than rely on Netflix to reach online viewers. Netflix was down 2.35 per cent.

Travel website operator Priceline fell 7.92 per cent, weighing the most on the S&P and the Nasdaq, following a disappointing forecast. Travel-review website operator TripAdvisor was down 7.35 per cent.

Office Depot tumbled 23.57 per cent after the office supplies retailer’s quarterly results came in below estimates.

Rising geopolitical tensions boosted defence stocks. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, lifting the Dow Jones US defence index 1.17 per cent.