European stocks slip back as Greek debt fears take hold

Euro zone government borrowing costs, including Ireland’s, fell again to new lows

Germany’s Dax, down 1.9 percent, underperformed the wider market, after a recent sharp rally and as the euro gained against the dollar. Photograph: Reuters/Pawel Kopczynski

Germany’s Dax, down 1.9 percent, underperformed the wider market, after a recent sharp rally and as the euro gained against the dollar. Photograph: Reuters/Pawel Kopczynski

 

European stocks slipped on Thursday due to Greece’s worsening financial predicament, while euro zone government borrowing costs, including Ireland’s, fell to new lows.

US stocks were slightly lower, despite another flurry of better-than-expected profit reports, including ones from Netflix and Goldman Sachs.

German government bond yields fell to historic lows after the Financial Times reported that the International Monetary Fund rebuffed an informal request by Greek officials to delay loan repayments.

Greek prime minister Alexis Tsipras said he was “firmly optimistic” that his government would reach an agreement with foreign creditors.

The widening rift between Greece and its creditors over a deal that would unlock funds for Athens and prevent a default hit European stocks.

DUBLIN

ccording to one prominent Dublin brokerage, there was a “flight to safety” in European markets precipitated by deepening concerns over Greece, with more “defensive sectors” – those more insulated from what’s happening in the financial economy – benefitting.

Dublin’s Iseq index of shares finished the day fractionally up at 6,341, with food stocks Fyffes, Aryzta and Kerry all performing strongly.

Big volume trades in Fyffes, equating to nearly six times the average daily volume, saw the share jump nearly 5 per cent to €1.24. Aryzta and Kerry also enjoyed positive runs, rising 4.3 per cent to €64.20 and 1.7 per cent to €69.24 respectively. Shares in Aer Lingus surged by 5 per cent early in the day following reports of positive sentiment between prospective bidder IAG and the Government, and indications from Minister for Transport Paschal Donohoe that talks would conclude in weeks. The airline’s share finished 3.8 per cent up €2.38.

The main losers of the day were the property Reits. Green Reit fell by 3.3 per cent to €1.61 while Hibernia Reit dropped by 1 per cent to €1.24. LONDON London’s FTSE 100 Index failed to build on a new record high today, despite another batch of largely upbeat corporate results.The FTSE 100 Index was 36.3 points lower at 7,060.5, having peaked at a new intraday record of 7,119.4 near the start of the session.

A strong session for Unilever and Debenhams masked wider uncertainty over the outcome of next month’s general election and whether Greece is heading towards a debt default.

BAE Systems was one of the leading fallers in the FTSE 100 Index as its shares declined 3 per cent or 16.5p to 516p in the face of a ratings downgrade from UBS.

Others on the back foot included Guinness drinks giant Diageo after it said net sales declined 0.7 per cent in the quarter to March 31st, with volumes also down 0.8 per cent.

EUROPE

European equities retreated from 14-year highs on Thursday, led lower by shares in French retailer Casino, which reported slower sales growth.

The pan-European FTSEurofirst 300 index closed 0.9 per cent lower at 1,635.76 points after gaining 0.6 per cent on Wednesday to reach levels not seen since late 2000.

Germany’s Dax, down 1.9 percent, underperformed the wider market, after a recent sharp rally and as the euro gained against the dollar.

Airbus rose 2.1 per cent after proposing a buyback of as much as 10 per cent of its shares. Lafarge climbed 3.6 per cent after Holcim’s second-biggest shareholder signalled it may accept the merger with the Swiss cement-maker’s French rival.

NEW YORK

US stocks were little changed yesterday as mixed first-quarter results from companies gave investors few clues on the outlook for US earnings.

While shares of Netflix surged following blockbuster results, limiting losses on the S&P 500 and Nasdaq, shares of SanDisk slumped following a weak revenue outlook that added to concerns about the pace of top-line improvement.