Irish stocks slump most in western Europe on Brexit fears

Ryanair and Bank of Ireland down 5 per cent

Ryanair was among the Irish stocks being punished on Wednesday. Photograph: Reuters

Ryanair was among the Irish stocks being punished on Wednesday. Photograph: Reuters

 

Irish stocks slumped the most in western Europe on Thursday amid mounting concern that the UK could crash out of the European Union without a deal.

While UK prime minister Theresa May has sealed an accord with the EU on the terms of Britain’s departure from the bloc, opposition in Westminster is growing with two UK cabinet ministers quitting on Thursday. The Iseq fell 2.2 per cent at lunchtime in Dublin, with Ryanair and Bank of Ireland each down about 5 per cent.

“The challenge of getting the deal passed through cabinet was one thing, but getting a majority vote in parliament is a different beast, as the numbers seemingly don’t add up to have the deal voted through,” Alexander Wilson, an analyst at Goodbody Stockbrokers in Dublin, wrote in a note.

The Republic is considered the European economy most vulnerable to Brexit, with about 15 percent of exports going to the UK. This week, insulation maker Kingspan said it’s monitoring a “general sense of nervousness prevailing globally.”

As well as concerns over the health of the British economy, sterling weakness hurts Irish companies, which make a large chunk of their earnings in pounds.

Sterling tumbled after UK Brexit secretary Dominic Raab and fellow UK minister Esther McVey announced their resignations, with the pound falling 1.2 per cent to $1.2832, the weakest in more than two weeks.

The Iseq’s biggest percentage faller was unrelated to Brexit concerns.

Minnow Great Western Mining slid 33 percent and has lost almost two thirds of its value since saying on Wednesday that it is suspending drilling in Mineral County, Nevada, until next spring due to freezing weather.