Greek low growth forecast hits markets
EU slashes growth predictions for Greece from 2.5 per cent to 0.5 per cent
Permanent TSB was the most active share on the Dublin market, with almost 21 million shares changing hands on what was the first official trading day for the stock
European markets failed to hold on to gains as the European Union slashed its growth forecast for Greece from 2.5 per cent to 0.5 per cent.
The Iseq index of Irish shares held up well, however, though traders said that if concerns about Europe continued, it would undoubtedly have its effect. The index closed at 6,103.89, a rise of 0.61 per cent.
Irish market heavyweight CRH, which is to make a Q1 update statement today, closed at €25.13, a rise of 1.23 per cent, indicating perhaps that investors are expecting some good news, and positive attitude, from the building materials giant.
Ryanair had good numbers in its April traffic figures,which were up 16 per cent on last year, and included a good load factor. The stock closed at €11.12, an increase of 1.83 per cent. Aer Lingus finished the day down 0.55 per cent, at €2.33.
A survey showing growth in Britain’s construction industry slowed sharply in April and uncertainty about the outcome of tomorrow’s election also dissuaded investors from placing strong trading bets.
After trading higher in the first, the blue-chip FTSE 100 index gave up gains and finished 0.8 per cent weaker at 6,927.58 points, dragged down by a 2.2 per cent fall in the UK banking index.
Europe’s biggest bank HSBC, down 3.2 per cent, was the biggest faller in the banking index – despite a 4 per cent rise in first-quarter pretax profit – after warning that Britain’s bank tax was preventing it from raising dividend payouts and that was a key concern of investors.
Lloyds closed 0.5p lower at 82.4p while Royal Bank of Scotland slipped 4.5p to 335.3p. Barclays shed 4.2p to 250.2p.
The UK Oil and Gas index rose 1.3 per cent as oil prices rose to trade near their 2015 highs after protesters shut down the eastern Libyan oil port of Zueitina. With a barrel of Brent crude heading above $68 US, British Airways owner IAG ended up falling the most. It dropped nearly 4 per cent, or 20.5p, to 537p.
“We still have Greece in the background,” said Peter Dixon, an economist at Commerzbank in London. “Some of the earnings are supportive, but these tend to be short-term effects which can fade out quickly.”
Germany’s DAX Index slid 2.5 per cent to its lowest level in two months.
Among stocks moving on corporate news, UBS jumped 3.8 per cent after reporting that quarterly net income almost doubled.
The Nasdaq Biotechnology Index slid 1.8 per cent. Chevron climbed and Transocean jumped 5.6 per cent as oil topped $60 a barrel for the first time this year.
The Standard & Poor’s 500 Index declined 0.7 per cent to 2,099.13 at 11:51 a.m. in New York. The Dow Jones Industrial Average slipped 82.85 points, or 0.5 percent, to 17,987.55. The Nasdaq Composite Index dropped 1.2 per cent.
(Additional reporting, Reuters, Bloomberg)