London terror attack weighs on tourism and leisure stocks
Irish and German stock exchanges among those closed for public holiday
Google head office, Dublin. Google-owner Alphabet hit the $1,000 mark and was among the biggest boosts to the S&P and the Nasdaq on Monday. Photograph: Brenda Fitzsimons
European shares slipped on Monday as energy stocks dragged and banks were led lower by Spain’s Banco Popular on concerns that it could be wound down.
Travel and leisure stocks dragged British indices lower as investors responded to Saturday’s terror attack in London.
US stocks fluctuated near records as data showing steady growth in the services industries bolstered confidence in the economy.
US treasuries fell with the dollar as money markets shrugged off the terror attacks in the UK. Crude prices fell.
The Irish Stock Exchange was closed on Monday due to the public holiday.
The FTSE 100 Index was down 21.87 points at 7,525.76, with tourism-focused firms under pressure in the first trading session since the atrocity.
Budget airline easyJet and Aer Lingus and British Airways-owner IAG were down 45p to 1,344p and 15.5p to 592p respectively, while Merlin Entertainments – the company behind London Eye and Alton Towers – fell 13p to 524p.
Mining giant Antofagasta down more 3 per cent, or 28.5p, to 776.5p. Blue-chip companies, which report in US dollars or euro, can struggle on the FTSE 100 when the pound rises because their earnings suffer.
Online grocer Ocado saw shares surge before slipping back after it sealed a long-awaited overseas deal for its software platform. The FTSE 250 firm said it had signed an agreement with “a regional European retailer” to help it access website software and other technology. It said the customer “wishes to remain anonymous until it launches its online business”. Shares in Ocado closed down 3.8p at 312.2p.
The biggest risers on the FTSE 100 were Old Mutual up 4.5p to 201.5p, Standard Chartered up 8p to 753p, Marks & Spencer up 3.4p to 371.1p, and Next up 39p to 4,400p.
As well as Ireland, the German and some other European stock markets were closed for a public holiday, reducing overall activity.
Banks were the biggest drag to the STOXX index with Banco Popular falling as much as 18 per cent to fresh record lows on worries that it could be wound down if it does not find a buyer. Investors dismissed attempts by the company’s chairman, Emilio Saracho, to soothe nerves.
Italian broadcaster Mediaset and Spanish subsidiary Mediaset Espana were also big fallers as concerns grew over Vivendi potentially freezing its stake at 10 per cent, to comply with the demands of AgCom, Italy’s telecoms competition regulator.
Oil stocks were another drag as the oil price dropped after Gulf states and Egypt cut ties with Qatar, accusing it of supporting terrorism. Shares in France’s Total fell 0.8 per cent while Italy’s Eni declined 0.6 per cent.
In a sign that sell-side enthusiasm for European equities may be starting to wane, Morgan Stanley reined back its position on the region on Monday, saying it now preferred Japanese and US stocks.
In a note entitled “Curbing our Enthusiasm”, the bank’s strategists said European equities are now a “consensus overweight”.
Apple weighed on all the three major US indexes following a rating cut and ahead of its developer conference. The iPhone maker’s stock was down 1 per cent after brokerage Pacific Crest downgraded it to “sector weight” from “overweight”. There was also speculation prior to the afternoon that it might take the unusual step of introducing a new product at its conference on Monday.
Google-owner Alphabet hit the $1,000 mark and was among the biggest boosts to the S&P and the Nasdaq.
Herbalife was down 7.3 per cent at $68.54 after the nutritional supplement maker lowered its sales outlook for the current quarter.
Oil prices fell more than 1 per cent on concerns that the cutting of ties with Qatar by top crude exporter Saudi Arabia and other Arab states could hamper a global deal to reduce oil production.
(Additional reporting: PA/Bloomberg/Reuters)