Markets remain tentative amid escalating trade tensions

Social media giants fall as chief executives appear before the US Congress

Traders at the New York Stock Exchange. Photograph: Michael Nagle/Bloomberg

Traders at the New York Stock Exchange. Photograph: Michael Nagle/Bloomberg

 

European shares traded lower on Wednesday as trade tensions and growing worries about emerging market currencies cut investor appetite for risky assets. The pan-European Stoxx 600 ended down 1.1 per cent at a two-month low, with losses spread across sectors and trading centres despite data showing that euro zone business activity accelerated slightly in August. A rare glimmer of optimism lifted Italian banks, buoyed by deputy prime minister Matteo Salvini saying Rome would “try to be good” with respect to European Union budget rules. Rating agency Scope also issued a note saying that while “volatile politics have reignited fears around Italian banks”, there has been progress on non-performing loans.

Dublin

The Iseq fell nearly 60 points to close at 6,697. One of the main drags was Ryanair, which saw shares drop 1.2 per cent to €13.60 despite pilots voting to accept a deal ending a dispute with the airline that previously led to several oneday strikes. Independent News and Media (INM) shares fell 10 per cent to eight cent on foot of the appointment of High Court inspectors to the firm amid allegations of corporate misconduct.

House builder Cairn Homes had another volatile day, closing down 0.6 per cent at €1.52 having been down by more than 3 per cent at one stage.

The State’s leading food company, Kerry, saw its shares drop nearly 3 per cent to €96 while rival Glanbia was marginally down at €14.77. Bank of Ireland was up 0.4 per cent at €7.14 while AIB was down 1 per cent €4.78.

London

The UK’s top share index retreated on Wednesday as big oil stocks fell, though house builders were a bright spot following comments from Berkeley Group about the London housing market. Britain’s blue-chip Ftse 100 index ended down 1 per cent at 7,383.28 points. The Ftse widened its losses after a report saying Germany and the UK had dropped key Brexit demands boosted sterling, putting more pressure on the internationally exposed index.

A drop in the price of oil weighed on heavyweight energy stocks, with shares in both BP and Royal Dutch Shell falling about 1 per cent. Berkeley Group led UK house builders, its shares gaining 0.8 per cent after giving a trading update. The firm said Britain’s housing market was sluggish amid uncertainty over Brexit, but added that prices and demand in London were holding up. Among smaller stocks, William Hill was one of the strongest performers on the Ftse 250 as investors cheered its third US deal in just over a month. William Hill’s shares rose 4.8 per cent after it signed a 25-year sports-betting deal with casino operator Eldorado Resorts.

Europe

Shares in UBI Banca, Banco BPM and Mediobanca rose 3.3-7.2 per cent. Corporate announcements also triggered strong swings. French pharmaceutical group BioMerieux rose 4.7 per cent after better-than-expected first-half results and a raised 2018 outlook. In the same sector, Bayer lost 1.7 per cent after reporting a disappointing 3.9 per cent gain in underlying core earnings for the quarter. Tech was the biggest sectoral loser, down 3 per cent. Top loser among tech was Temenos, which fell 11.3 per cent after Jefferies started coverage of the banking software maker with an underperform rating, saying margin performance is likely to disappoint. The biggest faller on the Stoxx was Denmark’s Ambu, whose shares sank 13 per cent after news that a shareholder sold shares in the company.

New York

The Nasdaq sank more than 1 per cent on Wednesday, with social media companies leading technology stocks lower as Twitter and Facebook executives faced US Congress over what politicians see as a failure to combat foreign efforts to influence US politics. The broader market was also weighed by a drop in energy stocks as oil prices weakened and fears over the likelihood of the United States slapping new tariffs on Chinese goods as early as this week. Twitter dropped 5.4 per cent and Facebook fell 1.8 per cent as their top executives faced politicians. Alphabet, whose offer to send its chief legal officer to Congress rather than its chief executive officer was declined, slid 2.6 per cent. Snapchat-parent Snap Inc was down 4.4 per cent. “The testimony is going to affect the tech sector and there are some concerns about how government and policies could pose as a threat to these growth stocks,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada. – Additional reporting by Reuters