European stocks slump on ECB disappointment

Rocket Internet tumbles 12 per cent to €37.61 on its first day of trading

European stocks plunged the most in more than 15 months on concern the European Central Bank’s asset-buying programme won’t be enough to boost inflation and revive the euro zone economy.

The Stoxx Europe 600 Index sank 2.4 per cent to 332.05, it’s lowest level since mid-August. All 19 industry groups declined with gauges of oil and gas companies and banks falling the most. The decline brings the Stoxx 600 down 4.8 per cent from an almost six-year high in early September. The Iseq index also ended the day lower, down 2.4 per cent or 112.06 points to 4,728.39.

DUBLIN Analysts said there was a big sell-off on the Iseq as investors took fright at the lack of clarity in comments coming from ECB president Mario Draghi on how much quantitative easing there would be.

Companies with a decent European exposure were caught out with building materials group CRH losing 3 per cent to close at €17.55. Kerry being a defensive stock didn't fare well either. It closed down 2 per cent at €54.65. Bank of Ireland was one of the biggest fallers on the Iseq yesterday as it followed other peripheral banks lower. It closed down 4.50 per cent to 0.29 cents.


Airlines were also badly affected but Ryanair bucked the trend on the back of record traffic figures for September. The airline, which said traffic rose by 400,000 to 8.5 million last month, was up nearly 1 per cent to €7.41. LONDON The blue-chip FTSE 100 index ended down by 1.7 per cent, or 111.13 points, at 6,446.39 points – its lowest closing level since ending at 6,439.96 points in December 2013 as traders expressed disappointment in Mr Draghi's comments.

The FTSE 100 is currently some 7 per cent below its peak for this year of 6,904.86 points, reached last month which marked the FTSE’s highest level since early 2000.

Equipment rental company Ashtead was the worst-performing FTSE stock in percentage terms, falling 4.6 per cent. Traders attributed Ashtead's fall to a 6 per cent drop on Wednesday in the shares of its rival United Rental, with both companies hurt by weak US factory activity data this week. Ashtead derives 84 per cent of its revenues from the US. EUROPE European lenders lost 3.3 per cent for their biggest plunge since June 2013. Banco Popolare slumped 6.2 per cent to €11.07 and UniCredit fell 4.8 per cent to €6. Banco Popular Espanol declined 5.9 per cent to €4.60.

Rocket Internet tumbled 12 per cent to €37.61 on its first day of trading. The Berlin- based firm known for replicating businesses from Groupon to Airbnb completed the biggest initial public offering in Germany since 2007. It priced the sale at the top end of its range. Shares of online apparel retailer Zalando sank 11 per cent to €19.23 on their second day of trading. Hochtief jumped 6.3 per cent to €56.33. Germany's biggest builder said it will repurchase as much as 10 per cent of its share capital. NEW YORK US stocks were down in early trading, putting the S&P 500 on track for a fourth session of losses, as energy shares dropped and the ECB failed to ease worries about the euro zone's recovery.

Stocks extended Wednesday’s sharp decline, with the S&P 500 falling below its 150-day moving average for the first time since November 2012

The Dow Jones industrial average was falling 72.93 points, or 0.43 per cent, to 16,731.78, the S&P 500 was losing 12.17 points, or 0.63 per cent, to 1,933.99 and the Nasdaq Composite was dropping 33.43 points, or 0.76 per cent, to 4,388.65.

Airlines and transportation stocks remained lower after it was confirmed that a patient was diagnosed with Ebola in the US. The NYSE ARCA Airline index rose 1.7 per cent while Delta Air Lines was up 3 per cent to $35.93. It also reported a modest improvement in its September load factor.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist