Stocks slide worldwide in advance of Trump speech
Irish index of shares ends the day 0.75 per cent lower and all major US indices fall
Donald Trump: Traders are taking a wary stance ahead of his address to House and Senate lawmakers on Tuesday. Photograph: Paul J Richards/AFP/Getty Images
Global stocks retreated, erasing gains for the week as a glum set of European corporate earnings compounded investor nervousness before a major speech from US president Donald Trump.
The Irish index of shares was not immune to the slump, ending the day 0.75 per cent lower at 6,484.39. Shares in Bank of Ireland were down 3.4 per cent at 22.5 cent for the session as the company reported a 16 per cent decline in its full year pre-tax profit and said it was postponing the resumption of a dividend payment until next year. Payments have been on hold since 2008. General weakness in financials across Europe will not have helped.
Index heavyweight CRH continued to struggle amid fears that Mr Trump’s $550 billion (€520 billion) infrastructure spending plan may be delayed. The shares ended the day at €31.4350, almost 1.5 per cent lower.
Kerry showed some improvement, the shares rising half a per cent to €72.64. Glanbia, meanwhile, lost 1.4 per cent to end at €18.145, after what traders said was a strong week.
Britain’s top share index hit a two-week low, ending a run of three straight weeks of gains, with lenders Standard Chartered and RBS among the biggest fallers. The blue-chip FTSE 100 index closed 0.4 per cent down, having touched its lowest since February 10th earlier in the session, to finish with a 0.8 per cent decline on the week.
Shares in RBS fell 4.5 per cent after the bank reported a sharp jump in losses as higher misconduct charges and restructuring costs underscored the challenges facing the lender nine years after it was bailed out in the world’s biggest bank rescue.
Though Standard Chartered returned to profit, its decision to hold off from paying a dividend as it swallowed the costs of a restructuring programme sent its shares down 2.7 per cent against a 0.8 per cent fall for the UK banking index.
Mining stocks also slipped, with the sector index down 2 per cent, dragged down by falls of 2.1 per cent to 3 per cent for Rio Tinto, BHP Billiton and Antofagasta. The industrial metals sector index lost 3.3 per cent, its biggest daily decline in more than two months.
British Airways’ owner IAG was the top FTSE gainer, rising 4.2 per cent after reporting an 8.6 per cent rise in annual operating profit.
European equities retreated, erasing all gains for the week. Shares slid the most this month as both BASF and Vivendi gave downbeat outlooks for this year. Oil pared a weekly advance, while silver headed for the longest run of weekly gains since 2006.
US stocks fell across the board with all major indices lower. The Dow Jones Industrial Average, which was down 0.24 per cent at 9.53am in New York, had previously hit daily highs for the past 10 sessions, its longest streak since 1984.
“Markets are pricing in the Trump agenda and they’re pricing in a lot of high expectations,’’ Stephen Wood, chief market strategist for North America at Russell Investments in New York. “The likelihood that there are going to be some legislative and political bumps on the road is certainly very high. A rally predicated on political policy can expect some volatility within it.’’
Traders are taking a wary stance heading into the weekend, before Mr Trump’s address to House and Senate lawmakers on Tuesday in the US.
If Trump’s speech fails to provide details “the rally that we’ve seen in the past three months could become susceptible to some profit-taking”, Michael Hewson, the London-based chief market analyst at CMC Markets, said.
The S&P500 Index was down 0.35 per cent and the Nasdaq Composite Index dropped 0.41 per cent.
Additional reporting: Reuters, Bloomberg