Stocks fall on lower growth forecasts

Exploration and production-related stocks plunge after oil prices tumble

Exploration and production-related stocks tumbled after top oil exporter Saudi Arabia cut prices to the US. Brent crude slid to near $82 a barrel – extending losses to a fourth session. Photograph: Reuters

Exploration and production-related stocks tumbled after top oil exporter Saudi Arabia cut prices to the US. Brent crude slid to near $82 a barrel – extending losses to a fourth session. Photograph: Reuters

 

European stocks declined for a second day, as officials cut growth forecasts for the euro region, and oil companies plunged on tumbling prices for the commodity.

Gross domestic product in the 18-nation single currency region will rise by 0.8 per cent this year and 1.1 per cent in 2015, down from projections for 1.2 and 1.7 per cent in May, the European Commission said.

Analysts noted that while the quarterly earnings season has been reasonably positive, companies are reducing their earnings-per-share growth predictions for 2014/2015 and many investors are focusing on the macro-economic picture. DUBLIN Index heavyweight, building materials giant, CRH, fell 1.44 per cent to €17.435, despite one of its peers, US aggregates producer, MDU Resources, reporting quarterly results that were in line with expectations.

Paper and packaging multinational, Smurfit Kappa, dipped 0.24 per cent to close at €16.40.

No-frills airline, Ryanair, gained further altitude to follow the 8 per cent-plus gains that it made on Monday. Its stock climbed 2.56 per cent to close at €8.39. Investors bought more than eight million of its shares in Dublin yesterday. Bank of Ireland slipped 2.3 per cent to 29.8 cent. LONDON Exploration and production-related stocks tumbled after top oil exporter Saudi Arabia cut prices to the US. Brent crude slid to near $82 a barrel – extending losses to a fourth session.

Irish-based Tullow Oil fell 5.3 per cent to 457.9 pence sterling on the back of the news. Heavyweights Shell and BP were both down over 2.6 per cent. Hunting lost 5.1 per cent to 695.5 pence. Associated British Foods climbed 4.19 per cent to 2,783 pence as a stellar performance from its Irish clothing retailer and owner of the Penneys brand, Primark, outshone falling sugar profits.

Irish fuel and technology distributor, DCC, fell 1.28 per cent to 3,470 pence after it cut its earnings per share growth forecast on the back of unseasonably mild weather.

Imperial Tobacco rose 4.1 per cent after saying it is committed to annual dividend growth of at least 10 per cent. Legal and General Group rose 2 per cent after saying corporate bulk annuities this year rose to a record. EUROPE Seadrill dropped 8.6 per cent to 141 kroner. Fugro declined 12 per cent to €9.07, its lowest price since June 2003.

Hugo Boss fell 5 per cent to €99.85. The German fashion house forecast 2014 sales will climb 6 per cent to 8 per cent, down from a previous estimate of high single-digit growth. Hugo Boss cited slower European demand for the cut.

L’Oreal retreated 1.3 per cent to €122.55. The world’s largest cosmetics maker said third-quarter sales climbed 2.3 per cent, compared with the average analyst estimate for a 3.8 per cent gain.Securitas jumped 9.2 percent to 88.65 Swedish kronor. The world’s second-biggest guarding-services provider reported third-quarter net income of 571.9 million kronor, topping the 556 million kronor that was projected.

DSM rose 1.6 per cent to €49.76. The world’s largest vitamin maker reported third-quarter earnings before interest, taxes, depreciation and amortisation of €315 million, beating €313 million estimates.

US Oil price falls also hit US shares. The Energy Select Sector SPDR ETF fell 1.3 per cent to $84.95 in pre-market trading. Chevron Corp fell 1 per cent to $115.66. US crude dropped below $77 a-barrel in New York. It is down more than 30 per cent from a recent closing peak and down 7 per cent over the past four sessions.

Alibaba Group Holding rose 2.3 per cent to $104.15 on massive volume after the Chinese ecommerce giant reported its first quarterly results as a public company, posting revenue growth of 53.7 per cent. – (Additional reporting: Bloomberg/Reuters)