Markets nervous ahead of release of US Federal Reserve minutes

Markets were nervous ahead of a release from the US Federal Reserve of the minutes of its July policy meeting, which may shed light on when it will start scaling back its massive quantitative easing programme that has fuelled a rally in world equities over the past year.

DUBLIN
While the Irish market was largely flat on the day, it nonetheless outperformed its peers.

Food group Glanbia released a solid set of results, reiterating its full-year guidance. However, the stock was in negative territory for most of the day, closing down by 33 cent, or 3.1 per cent, at €10.04.

Brokers also pointed to "a bit of a move" in Bank of Ireland, which closed up 3 per cent at 21 cent on a day when other banks around Europe were going in the opposite direction.

Paddy Power was also up on the day, advancing by 80 cent, or 1.3 per cent, to finish at €61.79.

There was weakness in insulation and building materials group Kingspan, however, which gave up almost 1 per cent, or 10 cent, to finish down at €11.39. Ryanair was slightly higher at €6.82, up by 3 cent or 0.4 per cent, while CRH gave up 3 cent, or 0.2 per cent, to close down at €16.28.

LONDON
UK stocks fell to its lowest level in more than six weeks as investors awaited a signal from the Federal Reserve.

In London, the FTSE 100 index slipped 62.62 points, or 1 per cent, to 6,390.84, its lowest level since July 5th.

“We’re seeing a sell-off in markets because there is still nervousness that Fed tapering may start next month,” said Jacques Porta, who helps oversee $780 million as a fund manager at Ofi Gestion Privee in Paris.

Billiton, the world's biggest mining company, and Fresnillo, a producer of gold and silver, slid more than 1.5 per cent as metal prices dropped. HSBC led a decline in UK banks, falling by 2.3 per cent to 682 pence, while Aberdeen Asset Management fell 5.9 per cent to 356.3 pence.

EUROPE
European stocks edged lower after a sell-off the previous day as investors avoided making fresh bets .

The FTSEurofirst 300 index of top European shares closed down by 0.3 per cent at 1,210.99 points, after dropping 0.8 per cent on Tuesday, dragged lower by mounting expectations the Fed will start cutting down the amount of bonds it buys each month as soon as next month.

Investors were turning to defensive stocks in sectors such as telecoms and utilities, while the bout of profit-taking in cyclical shares that started last week continued.

Deutsche Telekom was up 0.7 per cent, EDF up 0.6 per cent, while miner Rio Tinto lost 2.1 per cent.

Shares in French water and waste group Veolia were the top gainers across Europe, jumping 8.4 per cent, with traders citing an upbeat note from Morgan Stanley which says the company is the most attractive turnaround story in the sector.

Heineken was among the biggest fallers, down 4 per cent after the Dutch brewer gave a muted outlook for the months ahead.

US
US stocks fell in early trade, with the Standard and Poor's 500 index on track for its fifth drop in six days, as investors weighed retailer earnings and home-sales data and awaited minutes from the Federal Reserve's July meeting.

Staples plunged after declines in its retail and international business caused a reduction in its earnings forecast.

Target slid 3.1 per cent as profit fell 13 per cent amid consumers’ caution in the face of higher taxes and unsteady employment.

Goldman Sachs slipped after a programming error caused the firm to send unintentional stock options orders in the first minutes of trading, pushing prices on dozens of contracts to a dollar each. – (Additional reporting Bloomberg/Reuters)