European stocks fall amid uncertainty over global economy

The US Federal Reserve says economic stability threatened by low interest rates

Wall Street was near session lows on Monday afternoon as energy stocks slipped along with oil prices, and Amazon and Netflix weighed on consumer stocks. Photograph: Michael Nagle/Bloomberg

Wall Street was near session lows on Monday afternoon as energy stocks slipped along with oil prices, and Amazon and Netflix weighed on consumer stocks. Photograph: Michael Nagle/Bloomberg

 

European stocks fell for the fourth time in five days as bond yields rose amid renewed uncertainty over the health of the global economy after comments by the Federal Reserve, while inflation data quelled demand for equities.

All industry groups in the benchmark Stoxx Europe 600 Index slid, pushing the benchmark gauge down 0.7 per cent.

Appetite for stocks was hit by comments from Federal Reserve vice chairman Stanley Fischer, who said economic stability could be threatened by low interest rates, but it was “not that simple” for the Fed to raise rates.

DUBLIN Irish shares were also in all- too-familiar negative territory, with the Iseq falling 0.22 per cent to 5,894.

UK-focused stocks were among the worst performers, with C&C falling 2.3 per cent to €3.47, while Kingspan declined by 1.6 per cent to €23.60 and Paddy Power Betfair lost 1.6 per cent to €96.95.

“We reckon that sharp post-EU referendum falls in sterling will begin to squeeze retail spending through higher imported inflation,” said Investec analysts in a note. “But for now, households seem to be shrugging off the Brexit shock.”

Bucking the trend, recruitment firm CPL Resources managed to add 1 per cent, to €5.30, after UK rival Robert Walters, which also operates in this country, reported strong third quarter profit growth.

LONDON The UK’s FTSE 100 Index declined 1 per cent to 6,947.5, with Pearson tumbling 8.4 per cent as the world’s largest education company reported a sales drop.

Insurers Admiral and Standard Life both fell by almost 4 per cent, after Standard Life said it would have to compensate some customers who had been mis-sold annuities in the past.

Oil and gas stocks were also under pressure as crude oil prices slipped by 1.3 per cent to $51.30 a barrel over concerns about too much supply in the market despite plans by the Organisation for Petroleum Exporting Countries to cut output next month.

Royal Dutch Shell declined by 1.8 per cent, while BP traded down 1.2 per cent.

EUROPE

Assicurazioni GeneraliUniCreditBanca Popolare di MilanoBanco Popolare

But the tone was more cautious around the rest of Europe.

Concern about whether the global recovery can withstand tightening in monetary policies has dragged the European benchmark Stoxx 600 index down 3.8 per cent from its September high.

Since European Central Bank president Mario Draghi downplayed the need for additional stimulus last month, bond proxies such as real estate, telecommunication and utility shares have posted some of the biggest slides among Stoxx 600 industry groups.

The ECB will give a policy update on Thursday, and most economists see it extending its bond-buying programme beyond March 2017.

NEW YORK

US stocks fell as declining oil prices pushed energy stocks down and consumer discretionary shares stumbled.

Stocks moved lower after comments from Federal Reserve vice chairman Stanley Fischer, who said economic stability could be threatened by low interest rates, but it was “not that simple” for the Fed to raise rates.

The Dow Jones fell 51.98 points, or 0.29 per cent, to 18,086.4, the S&P 500 lost 6.48 points, or 0.3 per cent, to 2,126.5 and the Nasdaq dropped 14.34 points, or 0.27 per cent, to 5,199.82.

A gauge of equity markets around the globe was down 0.34 per cent.

– (Additional reporting: Bloomberg, Reuters)