European shares lose ground amid concerns over global economic growth
Market report: Oil and related stocks drag on FTSE 100 after sharp fall in crude prices
Oil prices tumbled after reports of swelling inventories and forecasts of record US and Russian output hitting a market that may see weaker demand if global growth deteriorates. Photograph: AFP/Getty Images
European shares lost further ground on Tuesday as concerns over slowing global economic growth mounted, while an oversupply of oil rattled investors.
Oil prices tumbled after reports of swelling inventories and forecasts of record US and Russian output hitting a market that may see weaker demand if global growth deteriorates.
Investors were also bracing for a decision from the US Federal Reserve late on Wednesday on the course of interest-rate hikes, with many believing a rate increase is likely.
The Iseq closed down 0.9 per cent in line with the pattern across Europe on a day of both winners and losers. Building materials group CRH declined 0.7 per cent to €22.35, but Ryanair added 0.3 per cent to €10.55 as airlines climbed.
Dalata Hotel Group rose 1.2 per cent to €4.55 after it issued a generally positive trading statement and outlook, notwithstanding Brexit-related uncertainty. Bank of Ireland recovered some of its Monday losses, adding 1.1 per cent to finish at €5.01.
But insulation manufacturer Kingspan, which is set to join the S&P Europe 350 index next week, declined almost 4.5 per cent to €34.80.
Glenveagh Properties dropped 2.1 per cent to 71 cent, while Hibernia Reit declined almost 2 per cent to €1.31.
The FTSE 100 closed down almost 1.1 per cent at a two-year low. However, a small uptick for the mid-cap retail stocks that suffered sharp falls in Monday’s session, as well as a bounce for drugmaker Invidior, lifted the FTSE 350 index 0.5 per cent.
Invidior surged 17.7 per cent after it stuck to 2018 targets and announced plans to launch a cheaper version of its blockbuster opioid addiction treatment, Suboxone, as it seeks to claw back market share lost to copycat versions of the drug.
Online-only retailer Asos, whose profit warning had dragged down the likes of Amazon.com and Target in the last session, closed 0.5 per cent in the red, giving up earlier gains following a rating upgrade from Credit Suisse.
Heavyweight Tesco advanced 2.1 per cent on the main index.
The biggest drag on the FTSE 100 were oil and related stocks that faced pressure from a sharp fall in crude prices on oversupply worries. Shell dipped 2.4 per cent after Bloomberg reported the oil giant is in talks to buy Texas-based Endeavor Energy Resources for about $8 billion.
Irish company Tullow Oil fell almost 3.2 per cent on its London listing.
A 9.2-per cent plunge made electricity and gas utility firm National Grid the top blue-chip loser after Britain’s energy regulator proposed further cuts to the cost of capital for networks.
The Stoxx Europe 600 Index dipped 0.8 per cent. In Germany, the Dax contained its loss to 0.3 per cent, while France’s Cac 40 finished almost 1 per cent lower. Spain’s benchmark Ibex 35 was down 1.3 per cent.
French energy group Total dropped 2.5 per cent as oil prices fell, while its peer Engie declined 1.5 per cent.
Lufthansa was one of the top gainers in Frankfurt, adding 1.9 per cent, while in Paris, automotive supplier Valeo, carmaker PSA Peugeot Citroen and defence and aerospace giant Airbus were among the climbers.
US stocks gave up their gains as energy stocks were weighed down by the steep drop in oil prices and as the possibility of a partial government shutdown loomed. Senate majority leader Mitch McConnell said Democrats had rejected his spending Bill proposal. Without the passage of a spending Bill, several government agencies are at risk of a shutdown.
The Dow fell 28.22 points, or 0.12 per cent, to 23,564.76, the S&P 500 lost 12.2 points, or 0.48 per cent, to 2,533.74 and the Nasdaq dropped 4.65 points, or 0.07 per cent, to 6,749.08. – Additional reporting: Reuters/Bloomberg.