European stocks drift lower as end-of-year rally fizzles out

Miners and technology shares fall most, while travel and energy shares rise in final week

European stocks inched lower amid thin trading, with investors signalling reluctance to extend a rally as the last full trading week of 2016 unfolded. The Stoxx Europe 600 index fell 0.2 per cent at the close, on trading volume that was 38 per cent lower than the 30-day average. Miners and technology shares fell the most, while travel and energy shares rose.


Dublin’s Iseq bucked the European-wide trend to close marginally up at 6,487, albeit trading volumes were decidedly light.

Ryanair rose 1.7 per cent to €14.64 tracking other airline stocks, which rose on the back of positive news surrounding Europe's travel sector.

Hotels group Dalata, however, was down again with shares falling nearly 3 per cent to €4.36. The slide was put down to profit taking following a positive trading statement earlier in the week.


Ferries company Irish Continental Group fell 0.5 per cent to €4.33 after it was revealed that chief executive Eamonn Rothwell of Irish Continental had been awarded shares worth €1.7 million.

Bank of Ireland recaptured Wednesday's losses with a 2.5 per cent rise to 24 cents after an up and down week for European banking stocks. Rival Permanent TSB also rose nearly 2 per cent to €2.80.


British shares edged up to two-month highs on Thursday, led by gains in the energy sector and among precious metals miners. The blue chip FTSE 100 index ended up 0.3 per cent in thin pre-Christmas volumes at its highest closing level since October 11th and its highest overall since October 25th.

Oil company BP rose 1.3 per cent and was the biggest contributor in terms of index points.

The lower dollar also gave a lift to gold prices, which in turn boosted shares in precious metal miners Fresnillo and Randgold, among the biggest gainers on the FTSE and up 2.8 and 2.5 per cent respectively.

BHP Billiton and Rio Tinto fell 1.6 and 1 per cent respectively. China is the world's biggest consumer of metals.

British mid-cap stocks outpaced their blue chip peers, with the FTSE 250 index rising 0.8 per cent. Shares in car dealer Inchcape were the top gainer on the index, jumping 7.8 per cent to their highest since early September after the firm bought a distribution business in South America.


Actelion led an advance in healthcare shares, up 4.1 per cent as it restarted talks with Johnson and Johnson about a possible deal, just a week after ending earlier discussions. Equities are drifting lower after the Stoxx 600 reached its highest level in almost a year.

While Spanish lenders weighed on the benchmark on Wednesday, about 21 per cent of the European gauge’s members set new four-week highs.

Troubled Italian lender Monte Paschi was 1.4 per cent lower, after swinging between a loss of 10 per cent and a gain of 4 per cent. The bank said no anchor investor has shown interest in a sale of shares.


US stocks slipped in light trading on Thursday ahead of the holiday season, pulling the Dow Jones Industrial Average further away from 20,000, a level it has never breached. The Dow has been flirting with the historic level for the last several days and came within 13 points of the mark on Wednesday.

Amazon's 0.43 per cent fall was a drag on the sector. Apple fell 0.6 per cent to $116.35 after Nokia said it had filed a number of lawsuits against the iPhone maker for patent infringement. The stock was the biggest drag on the S&P and Nasdaq.

ConAgra rose 2.9 per cent to $39.13 after the packaged foods maker's quarterly profit beat estimates. Red Hat fell 12.5 per cent to $69.79 after the Linux software distributor's quarterly revenue fell below estimates. The stock was among the biggest drags on the S&P. Declining issues outnumbered advancers on the NYSE by 1,531 to 1,223.

– (Additional reporting by Reuters)

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times