Market Report: Europe stocks hurt by decline in energy

Gains pared after US Federal Reserve signals possible rate rise in December

European stocks fell for the first time in four days, led by declines in commodity and energy producers.

The Stoxx 600 lost 0.4 per cent at the close of trading, tracking a drop in US shares. Europe's equity gauge pared gains yesterday after the Federal Reserve signalled a December rate increase was possible.

In Ireland, the Iseq overall index closed down 0.2 per cent at 6,531.46.




closed down 1.3 per cent at €25.14 following a negative report on the sector by Merrill Lynch. Both banks declined yesterday, with

Bank of Ireland

down 2.7 per cent at 32.1 cent and

Permanent TSB

finishing 3.7 per cent lower at €4.22.

The main riser on the day was recruitment firm CPL, which closed up 4.1 per cent at €6.402 on a day when the European Commission predicted Ireland's economy would be the fastest growing in the EU this year.


Britain’s stock market retreated as energy shares fell on dollar strength despite an earlier market rally after dovish remarks by Bank of England Governor

Mark Carney

. The Bank of England forecast little pick-up in inflation as it held interest rates steady, prompting investors to push back expectations for a rate hike.

Seven of the eight BoE policymakers voted to keep interest rates unchanged at a record low of 0.5 per cent, where they have been since 2009, and the central bank reduced its forecast for economic growth for this year and 2016.

The FTSE 100 closed in negative territory, down 0.8 per cent at 6,364.90 points despite rising after the bank’s decision at midday.

Resource firms led the index lower as oil giants BP and Royal Dutch Shell retreated on a stronger dollar, losing 2.9 per cent and 2.2 per cent respectively. Mining companies also underperformed, with Anglo American tumbling 7.7 per cent, Antofagasta down 4 per cent and Glencore down 3.5 per cent.

The FT350 mining index fell 3.7 per cent, its biggest daily setback since the end of September.Retailer WM Morrison also fell, shedding 5.6 per cent after reporting another drop in quarterly underlying sales.

At the top of the index was the RSA Insurance Group, which gained 3.4 per cent after reporting a rise in third-quarter net asset value.

Thomas Cook fell 7.3 per cent after Britain suspended flights to and from the Egyptian Red Sea holiday resort of Sharm al-Sheikh. EUROPE Anglo American Plc and ArcelorMittal slid 4.6 per cent or more, dragging miners to the worst performance among industry groups in the Stoxx Europe 600 Index.

Energy stocks halted a three- day advance, with Amec Foster Wheeler Plc slumping 23 per cent after saying it would halve dividends amid falling oil prices. Societe Generale and Adidas gained at least 4 per cent.

Among other stocks active on corporate news, Vestas Wind Systems climbed 5.2 per cent after saying it would buy back as much as €150 million of its shares. Credit Agricole dropped 8.3 per cent after its net income fell at its corporate and investment bank.  NEW YORK US stocks fluctuated in early trading, as banks rose amid increased bets for higher interest rates, offsetting weakness among commodity producers. With investors looking to today’s jobs report for fresh signs that the economy is strong enough to weather higher rates, equities were buffeted by a renewed sell-off in Valeant Pharmaceuticals that at one point helped sink healthcare shares the most in two weeks.

Bank of America Corp climbed 1.9 per cent to pace gains among financial firms, while retailers rose as Ralph Lauren surged after posting better-than-estimated earnings.  Facebook rallied to a record after reporting higher-than-expected revenue and profit. – (Additional reporting by Bloomberg and Reuters)

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times