European stocks hit one-year low as turmoil continues
Disappointing US data and falling oil prices cap off difficult week for stockmarkets
Dublin’s Iseq tracked the global sell-off and Ryanair finished the day down 2 per cent at €14.40
European stocks fell to a one-year low as concerns about global growth intensified amid disappointing US data and another precipitous slide in oil prices, which fell below $30 a barrel. The Stoxx 600 tumbled 3 per cent to 329.28 in London, taking its decline since last April to 20 per cent.
Shares extended declines after US retail sales expectedly fell in December to cap the weakest year since 2009, and a gauge of manufacturing in New York slumped. Concern about the rout in oil and the state of China’s economy has dominated global markets in 2016, helping spur a $5.6 trillion equity sell-off.
Bucking the trend was Paddy Power, which received regulatory approval for its proposed €10 billion merger with rival Betfair. The share, which had been trading down at about €110, rallied 7 per cent on the back of the news – the biggest intra-day swing in the market – to finish up 3.1 per cent at €118.
A further collapse in global oil prices saw shares in Petroceltic fall 2.2 per cent to €0.22 cents. Property firm Ires Reit outperformed the sector, falling only 0.9 per cent to €1.12 on the back of announcing an extension of existing credit facilities.
The FTSE is some 20 per cent below a record high of 7,122.74 points reached last April and 7 per cent down since the start of 2016. Mining stocks suffered a further blow after BHP Billiton said it would write down the value of its US shale assets by $7.2 billion due to the bleak outlook for oil prices.
BHP Billiton fell 6.4 per cent, while Anglo American slumped 11.5 per cent. Glencore also fell 6.5 per cent.
Among other fallers, Brenntag dropped 5.9 per cent after the chemicals firm was cut to “hold” from “buy” by Deutsche Bank. Energy companies also slid, with Total and Royal Dutch Shell pacing declines.
Among stocks moving on corporate news, Volkswagen retreated 3.5 per cent after data from the European Automobile Manufacturers’ Association showed the German carmaker’s market share in Europe last year fell for the first time since 2007.
US economic data was also not very encouraging, with an unexpected drop in retail sales and industrial output declining again in December, underscoring a worsening outlook for fourth-quarter economic growth. By early evening , the Dow Jones industrial average was down 418.05 points, or 2.55 per cent, at 15,961.
Dow components Exxon and Chevron were down 2-4 per cent, while Caterpillar dropped 4 per cent. Intel tumbled 9 per cent to $29.66 after its results and forecast raised concerns about the chipmaker’s growth.
That weighed on the chip index, which fell 4.5 per cent, its steepest drop since March.
– (Additional reporting by Reuters and Bloomberg)