Irish shares dip as rally across European markets runs out of steam

Rapidly spreading coronavirus, fears of deep global recession overshadow stimulus deal

Dublin’s Iseq stock market index dipped in early trading on Thursday, with the wider European markets returning into all-too-familiar negative territory as a two-day rally ran out of steam as the still rapidly spreading coronavirus and fears of a deep global recession overshadowed optimism from a historic $2 trillion (€1.9 billion) US fiscal stimulus deal.

The Iseq index dipped 0.4 per cent to 4,951.92 at 8.35am, with the pan-European STOXX 600 index falling 2 per cent. German shares dropped 1.8 per cent as a survey showed consumer morale in Europe’s biggest economy fell sharply to its lowest level since 2009.

Italian and Spanish stock markets fell between 2.2 per cent and 2.5 per cent as the number of fatalities from Covid-19 in Italy topped 7,500, while those in Spain rose beyond 3,400 and exceeded the total death toll in China.

Global stock markets also struggled to hold on to early gains as investors braced for a surge in US jobless claims, with estimates ranging from 250,000 to a whopping 4 million as economic activity ground to a halt under state-wide lockdowns.

In Dublin, banking stocks were mixed, with AIB up 2.3 per cent, while Bank of Ireland lost 1.9 per cent.

Baked goods maker Aryzta lost 20.6 per cent, while Tullow Oil, which had been under severe pressure in recent times, rallied 29 per cent, even as three-day rally in oil prices gave way to a fresh drop on Thursday.

British electricals retailer Dixons Carphone tumbled 2 per cent after warning it would not meet its forecast for 2019-20 profit and debt as the virus outbreak forced the closure of its stores in the UK, Ireland and Greece.

-Additional reporting, Reuters