European shares led lower by commodity stocks

Iseq ends lower with Bank of Ireland, Applegreen and Aryzta among the fallers

Valeant Pharmaceuticals plunged as much as 42 per cent to the lowest since 2011 after cutting its sales forecast. Photograph: Christinne Muschi/Reuters

Valeant Pharmaceuticals plunged as much as 42 per cent to the lowest since 2011 after cutting its sales forecast. Photograph: Christinne Muschi/Reuters

 

Global stocks dropped on Tuesday as the biggest two-day slide for commodity prices in a month reminded investors of the financial-market turmoil that marked the start of this year. While world equities have staged a comeback since mid- February, there are few signs that monetary easing in China, Europe and Japan is pulling the economy out of a slump.

Valeant Pharmaceuticals plunged as much as 42 per cent to the lowest since 2011 after cutting its sales forecast, while Dublin-founded Tullow Oil lost more than 10 per cent, as did deepwater drilling contractor Seadrill.

The Stoxx Europe 600 Index dropped 1.2 per cent with commodity producers posting the biggest drop of the index’s 19 industry groups. Antofagasta led miners lower, sliding more than 10 per cent after abandoning its dividend and saying annual profit slumped 99 per cent.

DUBLIN The Iseq index of leading shares ended the day in negative territory, down nearly 2 per cent or 114.18 points to 6,191,38.

Bank of Ireland, which has had a good run since ECB president Mario Draghi last week unleashed a new stimulus campaign, was one of the big losers in Dublin. Its shares closed nearly 6 per cent lower at 27 cent.

Swiss-Irish food group Aryzta, which saw its share price slump again on Monday after admitting it expected “erratic” growth over the next 18 months, experienced more investor displeasure on Tuesday, falling 6 per cent to €37.23. Aryzta’s shares have dropped in value by nearly 50 per cent since the beginning of last year.

Forecourt retailer Applegreen, another company to issue a trading update this week, also closed lower, losing 3 per cent to end the day at €4.45.

Other movers included hotels group Dalata, down 2 per cent to €4.23 and investment vehicle Green Reit, down 1 per cent to €1.37. LONDON A drop in the shares of major mining companies and a gloomy economic outlook from the Bank of Japan pulled Britain’s top equity index lower. The blue-chip FTSE 100 was down 0.6 per cent at 6,139.97 points by its close, slightly outperforming the broader European market. Investors also said an opinion poll giving the “Out” campaign a 2 percentage point lead ahead of Britain’s June 23rd referendum on European Union membership was hurting sentiment.

Miners such as Anglo American and BHP Billiton sagged as copper prices weakened.

Among mid-caps, oil producer Tullow Oil slid more than 11 per cent after declaring a force majeure on two cargoes of oil from Ghana following an issue on the floating production storage and offloading facility that exports the oil.

British insurer Legal & General was also among the top fallers on the FTSE 100, dropping 6.4 per cent on a weaker solvency ratio despite reporting broadly strong results.

EUROPE European shares retreated, led lower by commodity stocks, after Bank of Japan left policy unchanged but presented a bleaker view of Japan’s economy.

Shares in BHP Billiton, Glencore, Rio Tinto and Antofagasta fell 3.9 to 6.5 per cent, putting pressure on the pan-European FTSEurofirst 300 index , which fell 1.1 per cent at 1,341.5 points. Galenica shares slumped 14.2 per cent after the healthcare group announced its results and confirmed the group planned to divide itself into two independent listed companies in the fourth quarter of this year.

WALL STREET US stocks pared a slide as commodity shares trimmed losses, with the Standard and Poor’s 500 Index headed toward back-to-back declines for the first time this month, as investors considered the capacity of central banks to boost global growth.

Energy producers followed oil lower for a second day. Chevron dropped 1.9 per cent and ConocoPhillips declined 2.8 per cent. Chesapeake Energy sank 9.3 per cent after losing 6.8 per cent on Monday.