Irish and European values dip as investors fret on Brexit deal

Irish shares and the wider European equities market dipped on Wednesday as investors adopted a more cautious stance ahead of a bulletin on the much sough-after Brexit deal.

The markets absorbed developments that ranged from a report that the main stumbling block to a deal had been removed to news that the talks had hit a "standstill" during European trading. Shortly after the session ended, it emerged that UK prime minister Boris Johnson had told Conservative MPs that his government is nearing an accord with the EU.

The Iseq in Dublin closed down 0.5 per cent at 6,583.21, shedding some of Tuesday’s gains when the index advanced 2.5 per cent. The pan-European Stoxx 600 index closed down 0.1 per cent.

"It's all about which way the Brexit wind is blowing," said Edmund Shing, global head of equity derivatives strategy at BNP Paribas. "We'd see a lot of more interest in domestic cyclical names [if there was a deal]."

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DUBLIN

AIB lost 2.8 per cent to €3.26, while Ryanair declined by 1.6 per cent to €12.02. Malin was also out of sorts, falling almost 7 per cent to €4.00. The life sciences investment firm's former largest shareholder, the Woodford Equity Income Fund which was put into liquidation on Tuesday, will have to sell stakes in firms in which it is has co-invested with Malin.

Bucking the trend, Origin Enterprises added 3.5 per cent to €4.80, while Kingspan edged 0.6 per cent higher to €47.74.

LONDON

Sterling swung around five-month highs and stocks in London cut their losses amid a blizzard of contradictory Brexit reports.

The FTSE 100 closed down 0.6 per cent at 7,167.95, with trade tensions between the US and China also in sharp focus.

Rio Tinto fell 1.7 per cent after the miner said its iron ore shipments rose 5 per cent, but it cut its bauxite and alumina production forecast for the year. Rio's shares also took a hit from China iron ore plunging to a six-week low following a weak demand outlook.

Luxury car maker Aston Martin enjoyed some welcome gains. It finished the sessions 8 per cent higher, with broker Deutsche Bank putting a hold rating on the troubled stock, saying key risks to the group have already been factored into the shares.

Fashion retailer Asos soared 28 per cent amid investor hopes that the group's woes, which resulted in an almost 70 per cent slump in full-year profits amid warehouse issues in Germany and the US, are behind it.

EUROPE

European carmakers rose 1.5 per cent as industry data showed car registrations in the bloc rose 14.4 per cent in September, led by robust gains at major brands Volkswagen and Renault.

Investor focus shifts now to Europe’s earnings season, which gets under way in earnest next week.

Shares in Dutch semiconductor equipment maker ASML, which has surged more than 70 per cent this year, declined 4.5 per cent after reporting higher-than-expected quarterly profit and bookings.

Shares in Thyssenkrupp jumped 4.6 per cent after a report said rival bidders Kone and Blackstone had teamed up with potential partners to bid for the German group's elevator business.

NEW YORK

Wall Street finished the session lower. The Dow The Dow Jones Industrial Average fell 22.82 points, or 0.08 per cent, to 27,001.98. The S&P 500 lost 5.99 points, or 0.20 per cent, to 2,989.69 and the Nasdaq Composite dropped 24.52 points, or 0.3 per cent, to 8,124.18.

But a raft of upbeat results underlined a solid start to the third-quarter earnings season.

Investors cheered positive results from Bank of America, which rose after beating analysts' estimates for third-quarter profit. PNC Financial Services Group and Bank of New York Mellon also rose after better-than-expected earnings.

Analysts have forecast the worst quarterly earnings season in nearly three years for S&P 500 companies, as domestic economic growth shows signs of slowing on the fallout from the tariff war with China.

Among other stocks, United Airlines was up after the carrier raised its 2019 profit target.

Drug distributors McKesson, AmerisourceBergen and Cardinal Health jumped between 3 per cent and 5 per cent after a report that they were in talks with state and local governments to settle thousands of opioid lawsuits for $18 billion. – Additional reporting, Reuters