Media stocks weigh on European shares as WPP sinks
Dublin market underperforms, with Paddy Power, Glanbia and CRH all lower
Investors were keeping a close eye on monetary policy a day ahead of the start of a central bank symposium in Jackson Hole, although dovish comments by European Central Bank chief Mario Draghi had little market impact.
The Iseq was down over 1 per cent, underperforming against its European peers. There were a number of big movers on the downside, including Paddy Power Betfair, which was down 3 per cent to €75.80.
Also closing lower was food group Glanbia, falling nearly 4 per cent to €16.05.
Iseq heavyweight CRH, which announces results on Thursday, was weaker, ending the day 1 per cent lower at €29.16. Its stock has been weak since late May when it was trading at €34.86.
Ryanair lost 2 per cent but was in line with peers such as EasyJet, also down 2 per cent, and Air France down 1.8 per cent.
Among other Irish stocks, Independent News and Media, which early on Wednesday reported a near 20 per cent fall in first-half profits, was up 2.27 per cent. Food group Greencore was down almost 4 per cent.
A sharp fall for advertiser WPP was offset on the British market by gains in mining shares, which extended a strong run, and a buoyant health sector. The FTSE 100 ended flat at 7,382.65 points.
Shares in WPP, the world’s biggest advertising group , sank 10.9 per cent, its worst day in 19 years, after it cut its outlook for the full year. Consumer goods clients were trimming spending, it said.
The drop in WPP followed a big fall by Provident Financial in the previous session, tanking 66 per cent after it issued a profit warning, saw its chief executive quit, suspended its dividend and disclosed a regulatory inquiry.
Provident fell as much as 8 percent on Wednesday in volatile trade, then recovered to end 12.1 per cent higher amid a broker scramble to slash target prices and ratings on the stock.
Among risers, the defensive healthcare sector added the most points to the index, with AstraZeneca, GlaxoSmithKline and Shire gaining 0.4 per cent to 1.4 per cent.
The pan-European STOXX 600 index and euro zone blue-chips both dipped 0.5 per cent.
Fiat Chrysler ended up 5.8 per cent at an all-time high on continued speculation about potential tie-ups. One day after China’s Great Wall Motor cooled down prospects of a possible deal with Fiat, Bloomberg reported that the Italian American automaker was considering options, including a plan to spin off the up-market Maserati and Alfa Romeo brands.
Belgian chemicals group Umicore fell 2.5 per cent after Berenberg cut the stock to “hold” on valuation concerns. It has gained around 19 per cent year-to-date, outperforming the chemicals sector.
US stocks were lower late on Wednesday morning after President Donald Trump’s warning of a government shutdown to secure funds to build the Mexico border wall, added to nerves as the deadline to the raise the US debt ceiling looms.
Politicians face a late-September deadline to raise the debt ceiling or risk a default.
Fitch Ratings said on Wednesday a failure by US officials to raise the ceiling in a timely manner would prompt it to review its rating on sovereign debt, “with potentially negative implications”.
Lowe’s 5.5 per cent fall weighed the most on the S&P after the company reported a lower-than-expected profit and cut its margins forecast. Bigger rival Home Depot dropped 2.28 per cent, weighing the most on the Dow.
Shares of advertising firm Omnicom dropped nearly 4.5 per cent, while Interpublic Group fell 3.7 per cent after WPP cut its sales forecast. – Additional reporting: Reuters