European stocks fall from six-year high

Lufthansa among companies to cut profit forecasts, bringing down Irish airlines

German airline Lufthansa slid the most since September 2001 after lowering operating-profit estimates for this year and next. Photograph: Jasper Juinen/Bloomberg

German airline Lufthansa slid the most since September 2001 after lowering operating-profit estimates for this year and next. Photograph: Jasper Juinen/Bloomberg

 

European stocks fell from a six-year high as companies including Deutsche Lufthansa and Vallourec cut their profit forecasts. German airline Lufthansa slid the most since September 2001 after lowering operating-profit estimates for this year and next.

National benchmark indexes declined in all 18 western European markets yesterday. France’s CAC 40 fell 0.9 per cent, Germany’s DAX slipped 0.8 per cent and the UK’s FTSE 100 dropped 0.5 per cent.

In Dublin, the Iseq Overall Index fell by 1.2 per cent.

DUBLIN

Most of the main stocks on the Iseq closed in negative territory as a ripple effect spread from European markets.

Among the biggest losers on the day was packaging group Smurfit Kappa, which closed down 4 per cent at €17.60. This followed news that a small German producer was planning to open a new plant, thereby adding extra capacity to the market.

Both Aer Lingus and Ryanair were dragged down by German rival Lufthansa lowering its profit forecasted for both this year and 2015. Aer Lingus closed down 2 per cent at €1.49 while Ryanair shed 1.9 per cent to finish at €7.465.

Property investor Green Reit shed 2.2 per cent to close at €1.32 on the day it announced that it had exchanged conditional contracts to acquire a portfolio of central Dublin office and suburban office and retail warehouse assets for €375 million. This means that 96 per cent of the equity it raised is now invested.

Bookmaker Paddy Power closed down 3.6 per cent at €49.65 on the back of a couple of “decent” trades.

Bank of Ireland finished just above the 26.5 level at which Wilbur Ross sold his remaining 1.8 billion shares in the bank on Tuesday.

LONDON

UK stocks declined after the World Bank cut its global- growth forecast, overshadowing a report that showed the unemployment rate in Europe’s third-largest economy dropped to a five-year low.

Rolls-Royce Holdings, which makes engines for A350 planes, fell the most in almost four months after Emirates cancelled its entire order to Airbus Group NV for the wide-bodied aircraft.

J Sainsbury rose 1 per cent after saying sales growth will resume this year. Vodafone and Johnson Matthey traded without the rights to their latest dividends, trimming 8.2 points from the FTSE 100 Index.

The FTSE 100 dropped 0.5 per cent at the close of trading. The broader FTSE All-Share Index slid 0.5 per cent.

EUROPE

Lufthansa slid the most since September 2001 after lowering operating-profit estimates for this year and next. Vallourec plunged the most in two years after predicting earnings will drop 10 per cent in 2014.

Airbus lost 3.1 per cent after saying Emirates cancelled its order for A350 wide-bodied aircraft. IAG, the owner of British Airways, dropped 3.1 per cent to 400 pence and Air France- KLM fell 7 per cent to €11.05 .

Inditex rose 1.1 per cent after posting first-quarter profit that beat analyst estimates, and saying it plans a share split.

The Stoxx Europe 600 Index fell 0.6 per cent to 347.74 at the close of trading, its biggest loss since May 15th.

NEW YORK

US stocks fell in early trading yesterday, after the Standard and Poor’s 500 Index yesterday halted a four-day streak of record closes, as the World Bank cut its forecast for global growth and investors weighed equity valuations.

Bank of America dropped 1.8 per cent after a report said the justice department may seek $17 billion to settle investigations into mortgage lending.

Hilton Worldwide Holdings slid 2.8 per cent after registering to sell 90 million shares held by Blackstone Group.

Anadarko Petroleum rose to a record amid speculation of a takeover. H&R Block added 2.2 per cent after reporting sales that topped analysts’ forecasts. – (Additional reporting Bloomberg)