Markets fall as investors lose faith in Trump promises
Construction and mining stocks lose out and Dow heads for its eighth day of losses
Healthcare was the only sector in the black as Wall Street began to regain ground following a rough start on Monday. Photograph: Alex Grimm/Reuters
Markets fell on Monday as investors grew increasingly sceptical about US president Donald Trump’s ability to deliver on spending and economic reforms following the withdrawal of his healthcare legislation on Friday.
The Irish market lagged other European exchanges on what was a quiet day with no real corporate news to drive activity. Bank of Ireland gained 1.28 per cent to close at 23.8 cent on the first full day of trading since chief executive Richie Boucher announced plans to leave. Just over 40 million of its shares traded on Monday, slightly below average, dealers said.
Insulation maker Kingspan fell 1.53 per cent to €29.55 as investors backed off construction-related stocks yesterday amid doubts about the US administration’s pledge to step up infrastructure spending.
Building materials giant CRH, which draws half its revenues from the US, also suffered, shedding 2.09 per cent to €31.94. The stock has performed strongly since Mr Trump’s election the back of expectations that it would benefit from programmes such as increased spending on highway construction and maintenance
Gambling group Paddy Power Betfair dropped 1 per cent to €100 following news that Australia’s federal government is considering introducing an internet betting tax. The Irish group is the leading on-line player in the country’s market.
BT shares fell 0.7p to 324.95p after being stung by a record £42 million (€48.5 million ) fine by the telecoms watchdog, which is also forcing it to pay out £300 million in compensation to rivals such as Vodafone over delayed high-speed cable installations.
Babcock shares dropped 39.5p to 877p after revealing that its order book would take an £800 million hit after announcing plans to terminate a major government contract to decommission and manage 12 UK nuclear sites.
Shares in Old Mutual dropped 4.5p to 218p following news that it had offloaded a £355 million slice of its asset management arm as part of its business-wide overhaul.
Shares in Cobham fell 2.4p to 126.8p amid news that the embattled aerospace and defence firm faces an investigation by the financial watchdog over its handling of inside information.
The Stoxx Europe 600 Index lost 0.4 per cent at the close, with a gauge for the basic resources sector plunging 3.3 per cent. Mining stocks have been among the biggest beneficiaries of the Trump rally started in November.
The Stoxx 600 is still up 1.3 per cent in March as the Euro Stoxx 50 advanced 3.5 per cent, both outpacing the S&P 500 which is down 1.1 per cent over same period.
Greek stocks resisted the sell-off, with the ASE Index gaining 1.7 per cent, helped in part by optimism the country may reach a new deal with creditors as well as expectations of an improvement in results for the Greek banking sector.
Germany’s Dax fell nearly 0.6 per cent while the French Cac 40 dropped by about 0.1 per cent.
The fall-out was also hitting the currency markets, with the pound enjoying an uplift after the dollar sank in response to Mr Trump’s withdrawal of the healthcare bill on Friday.
Sterling was up 0.9 per cent against the greenback at 1.258 and rose 0.1 per cent versus the euro to 1.156.
Wall Street began to regain ground following a rough start on Monday. The S&P 500 financial index came off a two-month low on Monday, while other major S&P sectors trimmed losses.
Healthcare was the only sector in the black, propelled by gains in drugmakers and hospital operators. Prices of safe-haven gold pared some gains after hitting a one-month high, while the CBOE Volatility index, Wall Street’s fear gauge, eased from the day’s high of 15.11.
Still, the Dow was heading for its eighth straight day of losses – its longest losing streak since 2011.
Additional reporting: Bloomberg, Reuters