Markets dip as investors grow nervous about US rate rise

Markets dipped on Monday as investors grew nervous ahead of a US central bank meeting later this week that some speculate could raise interest rates.

The Federal Reserve – the Fed – is due to meet over two days this week and could announce on Thursday that it will raise borrowing charges after years of keeping them low.

A rate hike could boost the appeal of cash and bonds, which currently deliver low returns, and hurt stock markets.

DUBLIN

Monday was a largely quiet day with investors waiting on this week’s Fed meeting. The market performed in line with the rest of

Europe

, ending the day weaker.

Dalata was one of the bright spots. The hotel group climbed 1.69 per cent to hit €4.322, an all-time high. The company raised €160 million through a rights issue last week to pay for new properties and to refurbish some of its premises. Traders said that the shares pushed on again on Monday, with investors buying around 900,000 of its equities.

Insulation specialist Kingspan added 1.38 per cent to end the day at €22.095. Around 356,000 of its shares changed hands, a number that dealers said was light for the stock.

Bank of Ireland was one of the laggards, falling exactly 2 per cent to close at 34.3 cent on volumes of more than 50 million shares.

Multinational building materials giant CRH fell 1.88 per cent to €25.62.

Shares in service station operator Applegreen tumbled 3.61 per cent to €4.80 despite the group reporting a 35 per cent rise in gross profit to €57 million. However, only a handful of its shares traded, with just 8,800 or so units changing hands.

LONDON Britain’s top share index fell with weak Chinese data adding to nervousness about the possible US rate rise.

Shares in ARM Holdings rose 1.5 per cent to 948 pence, with traders saying that the company was benefiting from an upbeat article by Barron's on Apple, which uses the chip maker's designs in its products.

Glencore fell 4.41 per cent to 127.9 pence as Chinese data weighed on commodities prices and hit the mining sector. Antofagasta was off 2.47 per cent at 592.5 pence.

Morrison also retreated again, by 4.5 per cent to 157.8 pence, after HSBC cut its profit forecasts on the supermarket group.

EUROPE Mining shares came under pressure after prices of key industrial metals fell sharply. Copper was down 1.4 per cent, alongside Chinese equities, after data showed a lower than expected rise in China’s factory output, reinforcing worries about demand for the metal.

The STOXX Europe 600 Basic Resources index fell 0.8 per cent, dragged down by the drop in Glencore and Antofagasta.

The FTSEurofirst 300 index of top European shares finished 0.5 per cent lower at 1,393.71 points. It had risen to a high of 1,414.99 points earlier in the session.

On the broader STOXX 600 index, the biggest rise came from Societé Television Francaise 1. It rallied 6.5 per cent to €13.56 as newspaper Le Journal du Dimanche reported that the French government won't reintroduce evening advertising on state-owned television. Kepler Cheuvreux recommended buying the stock.

NEW YORK

US stocks were lower in early afternoon trade on Monday as investors awaited this week’s Fed meeting and fears of slow growth in

China

unnerved markets.

Alibaba Group Holding fell 4.4 per cent to $61.80 after Barron's said the company's shares could lose another 50 per cent of their value.

Yahoo, which has a stake in Alibaba, fell 3.9 per cent to $30.19. Solera Holdings jumped 8.7 per cent to $53.76 after the company said it agreed to be acquired by an affiliate of private equity firm Vista Equity Partners for $3.74 billion. – (Additional reporting Reuters/Bloomberg)