Investors unnerved by Brexit, Covid-19 and US election jitters

Brexit fears, Covid concerns and pre-US election jitters unnerved investors on Monday, sending shares sliding at their fastest pace since early September.

DUBLIN

Ryanair Holdings' shares fell as airlines across Europe bore the brunt of investors' fears about the ongoing impact of Covid-19 restrictions. The airline group ended the day 2.91 per cent down at €12.69 on Monday, having touched lows of €12.615. Dealers noted that the Irish carrier performed better than rivals, whose stock was down 4-7 per cent.

Bank holiday trading in Dublin meant volumes were light, but dealers said sentiment across world markets turned. “It’s Brexit, the US election and Covid – people are starting to digest the fact that vaccines are not that close over the horizon,” said one.

Irish lenders also suffered. AIB closed 2.86 per cent down at 96.85 cent. Bank of Ireland dipped 0.7 per cent to €1.978, but traders remarked that the stock was weak.

US and European stocks slip amid Covid-19 fears

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International building materials group and index heavyweight CRH fell 2.11 per cent to €30.63.

Kenmare Resources, which runs a titanium mine in Moma, Mozambique, dropped 2.14 per cent to €2.75, after announcing that it had begun production at a new plant that would produce 1.2 million tonnes of ore a year from 2021.

A dealer said the announcement prompted a reaction from both buyers and sellers of the stock on Monday.

LONDON

Aer Lingus and British Airways owner International Airlines Group (IAG) tumbled 7.6 per cent to 100.7p as investors ditched aviation stocks on the back of worries that virus rates are rising.

Budget carrier Easyjet, a key rival of Irish giant Ryanair, fell victim to the same negative sentiment towards the industry, shedding 5.25 per cent to 519.6p.

Irish builders' supplier and owner of Woodie's DIY chain, Grafton Group, was 2 per cent off at 722p. The group's sole listing is in London, as many of the businesses it owns are based in Britain.

Construction stocks generally fared poorly on Monday, traders said. UK house builder Taylor Wimpy shed 3.22 per cent to close at 115.55p. Rival Persimmon fell 3 per cent to 2,515p.

On the plus side, pharmaceutical group AstraZeneca rose 1.7 per cent to 8,077p as it resumed trials of its Covid-19 vaccine.

Elsewhere education publisher Pearson Plc added 3 per cent after UBS upgraded the stock to a "buy" rating.

Coca-Cola European Partners (CCEP) rose 0.3 per cent after the soft drink bottler made a buyout offer of $6.6 billion for its Australian peer Coca-Cola Amatil Ltd.

EUROPE

German airline group Lufthansa fell 5.23 per cent to €8.05, following the rest of European aviation on Monday. Air France KLM dropped 4.04 per cent to €3.16.

Oil major Royal Dutch Shell fell 3 per cent to €10.54 as crude prices tumbled amid fears that demand would slump. Rival Total was 3.65 per cent down at €27.06.

French stocks dipped 1.9 per cent. Turkish leader Tayyip Erdogan asked his compatriots to stop buying French goods on Monday.

Nick Nelson, head of European equity strategy at UBS, said the Swiss bank's target for Europe's Stoxx 600 index into the year end is 340 points, about 4.5 per cent below the current level, in part due to the impact of the latest round of restrictions.

US

US stocks’ decline accelerated on Monday afternoon, setting the Dow Jones Index for its worst day in more than seven weeks, as soaring coronavirus cases and political deadlock over the fiscal relief Bill raised doubts about the fate of the economic recovery.

Travel-related stocks, vulnerable to Covid-19 related curbs, dropped. The S&P 1500 airlines index fell 5 per cent and cruise line operators Carnival Corp and Royal Caribbean Cruises Ltd shed more than 9.5 per cent each.

US tech firms including Apple, Google-parent Alphabet and Facebook, which have Irish operations, are due to report third quarter earnings this week.