US manufacturing figures hit markets

MOST MARKETS across Europe closed down more than 1 per cent yesterday, although the Iseq index closed down just 0.46 per cent at 3,155.91.

The relatively strong performance of the Dublin market came as the Financial Times noted that US investment firm Franklin Templeton held 7 per cent, or €6 billion, of Irish government debt at the end of June, and may now own even more, and so has bet massively on the recovery of the Irish economy.

Volumes were thin and European traders said investors were awaiting the announcement tomorrow from the ECB as to what it will do, if anything, to give the euro zone a boost.

DUBLIN

CRH, THE largest stock on the exchange, finished the day down 1.18 per cent, to close at €13.84.

By way of contrast, Paddy Power is holding on to its recent gains as buyers come into the stock as it conducts its roadshow following its recent set of figures. The stock closed at €55.75, down 0.09 per cent.

Bank of Ireland, which performed well on Friday, drifted back down to last week’s levels yesterday and closed at €0.087, a fall of 2.25 per cent on the day.

Grafton, which had been weak over recent days, recovered somewhat yesterday to close at €3.22, a rise of 1.58 per cent.

Airlines Aer Lingus and Ryanair saw very little trading. The stocks ended up 0.25 per cent and down 0.95 per cent respectively.

Industrial holdings group DCC had a good day, finishing up 0.86 per cent at €21.15.

LONDON

UK STOCKS fell to their lowest in a month, led by a sell-off in mining companies, as a US manufacturing report added to concern the recovery in the world’s largest economy is slowing.

Rio Tinto Group retreated 2.6 per cent as iron ore traded near a three-year low. Xstrata, the target of a $33 billion takeover bid by Glencore International, declined 3.1 per cent.

Land Securities Group and British Land both slipped at least 2 per cent.

Vodafone declined 2.6 per cent to 178.45 pence after Sanford C Bernstein downgraded the mobile-phone company to market perform from outperform and cut its share price estimate by 21 per cent to 170 pence.

Next lost 2 per cent to 3,571 pence after Exane downgraded the UK’s second largest clothing retailer to underperform, the equivalent of a sell recommendation, from neutral. The brokerage said strong trading for the rest of the year was now priced into the shares.

Ashtead Group surged 12 per cent to 315.9 pence, its highest price since 1989, after the construction equipment rental company said full-year earnings would be “materially better” than it had forecast.

EUROPE

EUROPEAN STOCKS retreated the most in two weeks as a report showed that US manufacturing unexpectedly contracted in August.

The Stoxx Europe 600 index slid 1.1 per cent to 265.57 in London, its biggest drop since August 22nd.

Austria’s government bonds stayed higher as the nation sold €1.2 billion of securities, in the first of a series of debt sales by euro area countries this week. Spain, France and Germany also return to the market.

Royal Ahold rose 2.5 per cent after saying it may sell its 60 per cent stake in Scandinavian retailer ICA, possibly through an initial public offering.

Volkswagen dropped 2.9 per cent to €133.50. Europe’s biggest car-maker led a decline in auto companies after a report showed that German car registrations declined 5 per cent in August.

Vestas Wind Systems jumped 9.4 per cent to 48.50 kroner, its highest price in four months, after SEB raised the shares to buy from hold.

Bankia advanced 2.9 per cent to €1.41 as an economy ministry official said that the Spanish state’s rescue fund, FROB, will recapitalise the nationalised lender with treasury debt rather than cash. The official asked not to be named in line with government policy.

NEW YORK

US STOCKS fell, following a two- week decline in the Standard and Poor’s 500 index, as data showed American manufacturing contracted in August, fuelling concern the economic recovery is slowing.

Netflix slumped 7.1 per cent after Amazon.comreached a movie deal with pay-television channel Epix.

Alpha Natural Resources retreated 7.1 per cent as Dahlman Rose and Co. downgraded the coal producer.

Morgan Stanley advanced 1.9 per cent after CLSA recommended buying the shares.

Valeant Pharmaceuticals International rallied 15 per cent after agreeing to buy Medicis Pharmaceutical for $2.6 billion. Medicis surged 38 per cent.

The SP 500 declined 0.6 per cent to 1,400.36 at midday New York time. – (Additional reporting; Bloomberg)