European shares decline over fears of deep recession

Ryanair gained marginally despite revealing profits would be at lower end of expectations

Traders on the floor of the New York Stock Exchange. Photograph: Mark Abramson/The New York Times

Traders on the floor of the New York Stock Exchange. Photograph: Mark Abramson/The New York Times

 

European shares fell again on Friday as economic data showed the region was heading into a deep recession sparked by the Covid-19 pandemic.

DUBLIN

Ryanair gained marginally despite the airline’s announcement earlier on Friday that profits for the 12 months ended March 31st would be at the lower end of the €950 million-€1 billion it had forecast.

The airline also said that it would take an exceptional €300 million charge related to fuel hedging. Its stock ended the day 0.21 per cent up at €8.588 after hitting a low of €8.50 shortly before noon.

Food and ingredients processor Glanbia tumbled 7.38 per cent to €7.715 after dealers said one holder sold a large block of the Kilkenny-based company’s shares.

Bank of Ireland retreated 4.8 per cent to €1.605, while AIB dropped 2.03 per cent to 89.4 cent. Traders remarked that the lenders remained out of favour with investors as “no one knows where this crisis is going to end”.

Similar doubts prompted several investors to sell shares in house builder Glenveagh, which closed 2.42 per cent down at 46.35 cent. Rival Cairn Homes was almost flat, ticking up 0.15 per cent to 65.1 cent.

Paddy Power owner Flutter advanced 2.01 per cent to €79.18. Dealers said the bookmaking giant’s shares were still benefiting from news earlier this week that competition regulators in the UK had approved its merger with Canadian operator The Stars Group.

Insurer FBD shed 2.91 per cent to €6 after doubts grew about the prospect of it paying a final dividend. The European Central Bank has recommended that insurers not take this step, but the Irish company needs to hold an extraordinary general meeting to cancel its payment and cannot do so while Covid-19 restrictions apply, dealers said.

LONDON

Britain’s Ftse 100 share index logged its fifth weekly decline in six on Friday, with insurers leading losses after the EU regulator urged them to halt shareholder payouts, while oil stocks retreated after a recent surge.

Legal & General fell 10 per cent to 159.7p, though the group said it still intended to pay a 2019 dividend. Prudential lost 2.38 per cent to 920.2p.

Bus operator Firstgroup, owner of the Irish airports service Aircoach, climbed 10.11 per cent to 52.3p as it emerged as one of the beneficiaries of a £167 million (€190 million) British government aid package to transport companies to keep commuter services going for essential workers.

Shares in BP fell 4.5 per cent to 337.3p, while Royal Dutch Shell shed 4.1 per cent to 1,418.4p after rallying on Thursday, although oil prices climbed further on hopes of a global supply cut deal between Saudi Arabia and Russia.

EUROPE

The pan-European Stoxx 600 index closed 1 per cent in the red, with insurers dragging the most after a European Union regulator asked them to suspend dividends and share buybacks to shore up liquidity. The index fell about 0.6 per cent for the week. Still, it appeared to have gained a measure of stability after sharp daily movements over the past month.

Insurer Axa fell 4.6 per cent to €13.96 as investors expected it to comply with regulators’ urgings not to pay a dividend.

US

Wall Street’s main indices fell on Friday as the longest period of employment growth on record in the US came to an abrupt end, with data showing that hundreds of thousands of people lost their jobs last month due to coronavirus.

With the S&P 500 down about 25 per cent from its mid-February record highs, or nearly $7 trillion (€6.5 trillion) in market value, analysts said the magnitude of the decline in pay rolls had been priced in to a large degree.

Disney’s shares fell 3.5 per cent, while Under Armour shed 3 per cent after saying it would temporarily lay off employees at its US stores. – Additional reporting: Reuters