Softening Chinese demand troubles global investors

Iseq overall index fell 0.21%, outperforming European peers

Caterpillar, a bellwether for global industrials, fell more than 8 per cent. Photograph: Mike Blake/Reuters

Caterpillar, a bellwether for global industrials, fell more than 8 per cent. Photograph: Mike Blake/Reuters

 

European shares slid on Monday as optimism about the end of a US government shutdown faded and growth worries reared their head again.

DUBLIN

Monday proved to be a quiet day on Dublin’s main share index with low volumes recorded across most stocks.

Nevertheless, the main Iseq overall index dipped 0.21 per cent with moves primarily being dictated by UK market peers.

Cairn Homes and Glenveagh fell 1.47 per cent and 1.07 per cent respectively after UK peers dipped despite no specific news.

The Iseq financial index pushed up slightly on the day with Bank of Ireland ending 1.16 per cent higher at €5.66 while AIB dropped 0.74 per cent to €4.

Tomorrow is expected to be busier with Greencore and UDG Healthcare to release results. Neither stocks recorded much activity in advance of posting results.

Other notable losers on the day included Ryanair, which fell 1.91 per cent to €10.80, and Swiss-Irish baking group Aryzta, which closed 2.8 per cent lower on its Swiss listing and 1.72 per cent lower on the Iseq.

LONDON

London’s main bourse ended Monday’s session at its lowest in nearly a month although Ocado was a brightspot after a report of a deal with Marks & Spencer.

The FTSE 100 index slid 0.9 per cent to a low not seen since January 4th, while the more domestically-focussed FTSE 250 shed 0.6 per cent.

Tesco hit session lows after Britain’s biggest retailer said it could axe 9,000 jobs in its UK stores and head office to simplify operations and achieve targeted cost savings. The stock closed 1.7 per cent lower on the day.

Among a handful of gainers was Ocado, which rallied as much as 7 per cent during the day but ended with a 2.1 per cent gain after the Guardian reported the online grocer has held talks with Marks & Spencer on a food-delivery service. M&S also handed back earlier gains to rise just 0.1 per cent.

Flybe jumped 15.2 per cent after confirming its largest shareholder had urged the airline to remove its chairman and investigate its cut-price sale to a consortium.

EUROPE

The pan-European STOXX 600 lost 0.97 per cent, its biggest fall since January 3rd, as a profit warning from Caterpillar cemented investors’ pessimistic mood after data showed the second consecutive drop in Chinese industrial profits in December.

Reflecting investors’ fears about global growth, financials were the biggest drag on the STOXX 600, with HSBC, Santander, Allianz, and BNP Paribas down 0.8- 1.8 per cent.

Oil majors BP, Royal Dutch Shell, and Total tumbled as Brent crude futures suffered their biggest one-day drop in a month on evidence of yet more growth in US crude supply. The oil sector fell 1.9 per cent, its biggest loss in five weeks.

Another big loser was Alstom, which fell 3.6 per cent after the French group and Germany’s Siemens offered new concessions to try to satisfy the European Commission’s anti-trust concerns over their plan to merge.

NEW YORK

US stock markets slid worldwide on Monday as reduced outlooks from Caterpillar and Nvidia Corp underscored investor concerns about China’s economy.

Equity markets were hammered by a plunge in Brazilian miner Vale that wiped out about $13.8 billion in market value after a dam collapsed last week and killed at least 60 people. Vale shares dropped 16.9 per cent in New York trade. Caterpillar, a bellwether for global industrials, fell more than 8 per cent as its quarterly profit widely missed Wall Street estimates on softening Chinese demand, a strong dollar and higher manufacturing and freight costs.

Nvidia slid 12.02 per cent after the chipmaker cut its fourth-quarter revenue estimate by half a billion dollars, hit by weak demand for its gaming chips in China and lower-than-expected data centre sales.

– Additional reporting: Reuters