Shares tumble as investors worry about stronger euro

Financials lead Iseq lower as shares in Independent News & Media close down 18%

European stocks fell on Thursday as investors bet exporters will suffer from a stronger euro, after European Central Bank president Mario Draghi's comments bolstered the single currency.

The Stoxx Europe 600 Index retreated 0.4 per cent at the close. The benchmark erased a gain that had reached 0.5 per cent before Mr Draghi said officials would discuss altering the central bank's bond-buying programme in an autumn meeting, at a press conference in Frankfurt.


The Iseq index of leading shares followed other European indices lower, closing down 1.5 per cent or 101.24 points to 6.775.05.


The main movers were financials, which continued to put in a weak performance. AIB was down 2 per cent to €4.88, while Bank of Ireland was flat at €6.90. Permanent TSB enjoyed a small bounce to close up 2.5 per cent at €2.50.

Ryanair was another big mover in Dublin, down 3 per cent €18.15 on the back of Easyjet results which flagged weaker summer fares.

Construction stocks dragged following Draghi's bond-buying comments and talk of a need for more stimulus. CRH was down 1.7 per cent to €30.77 with Kingspan losing 3 per cent at €29.29.

Independent News & Media, which issued a profit warning late on Wednesday, was down 18 per cent to 9 cent with 32 million shares traded.


A drop in the pound following Draghi’s comments on potential changes to the ECB’s bond-buying programme sent the FTSE 100 higher by 0.77 per cent or 59.96 points to 7,487.87, helping it to easily outperform its European counterparts.

Unilever shares rose 75 pence to 4,389 pence after the consumer goods giant said pre-tax profits climbed 27 per cent to €4.6 billion for the first half of 2017, as efforts to boost profitability gathered pace despite volatile market conditions.

EasyJet tumbled 84 pence to 1,334 pence. While the budget airline upgraded its annual forecast following a 16 per cent rise in third quarter sales, its full-year profits are still expected to fall below last year's £495 million, when the firm was stung by the plunging pound.

Sports Direct shares surged 34.4 pence to 335.1 pence despite reporting a 59 per cent drop in annual profits linked to sterling's collapse, as investors put faith in its new store format and it said current year earnings are expected to grow by up to 15 per cent.

Premier Foods jumped 1.25 pence to 40 pence despite reporting a 3.1 per cent drop in first quarter revenue, after a combination of warm weather and lacklustre dessert sales dragged on its performance.


Among shares active on earnings, Wartsila Oyj and Boliden each rose at least 4.4 per cent after reporting second-quarter results that beat estimates.

Nordea Bank slid 5.2 per cent after missing profit estimates and delaying a decision on whether to move its headquarters from Stockholm.

Elsewhere, ABB dropped 2.8 per cent as higher commodity prices and overcapacity in some businesses weighed on profit at the world's largest power-grid maker.


US stocks traded little changed in late morning session on Thursday, struggling to hold on to the record highs on the S&P and the Nasdaq, weighed by a drop in consumer discretionary stocks and disappointing earnings by some big names.

Home Depot fell 4.1 per cent, shaving 45 points off the Dow and weighing the most on the S&P 500.

Sears soared 20 per cent after the retailer said it would sell its Kenmore home appliances on Amazon. com and integrate the brand's smart gadgets with the online giant's Alexa digital assistant. The news, however, dragged down the shares of fellow retailer Best Buy by 4 per cent.

Cigarette maker Philip Morris was down 2.8 per cent after its quarterly profit missed expectations and was among the top drags on the S&P.

Qualcomm fell 4.7 per cent after the chipmaker's forecast missed estimates.

Additional reporting: agencies

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist