Stocks slip on concerns over second wave of Covid-19 infections

Iseq fell 1.74% as banks take a hammering

Ireland’s Iseq all-share index slipped 1.74 per cent after the banks slumped on results from Bank of Ireland which spooked investors.  Photograph: Dara Mac Dónaill

Ireland’s Iseq all-share index slipped 1.74 per cent after the banks slumped on results from Bank of Ireland which spooked investors. Photograph: Dara Mac Dónaill

 

A jump in coronavirus cases in South Korea and Germany rattled investors and sent global equities markets lower on Monday, while safe-haven assets, including the dollar and US treasuries, edged higher.

Dublin

Ireland’s Iseq all-share index slipped 1.74 per cent after the banks slumped on results from Bank of Ireland which spooked investors.

Bank of Ireland, which took a €266 million loan impairment charge and racking up an additional €155 million hit in its wealth and insurance business, slid 14.9 per cent to €1.39. Traders said that the lender highlighted the challenging outlook “and the market didn’t like it one bit”.

AIB, which will also report results this week, fell 14.8 per cent to 92 cent.

Adding to the bank’s woes is the possibility that they’ll be removed from an MSCI index of global shares as a result of their declines over the past few months which has decimated their market value. Detail will be forthcoming on the MSCI reweighting on Tuesday.

Airlines, too, declined after British prime minister Boris Johnson on Sunday said that inbound travellers to the UK may be forced to quarantine for two weeks on arrival. Ryanair fell by 6.5 per cent on its Irish listing to €8.88.

Positive moves were seen from those companies which will be the first to benefit from a lifting of lockdown restrictions. Insulation maker Kingspan rose 0.4 per cent to €49.70 while Dublin headquartered but London listed builders merchanting company Grafton Group rose by 2.01 per cent.

London

London’s FTSE 100 closed marginally higher on Monday while the mid-cap FTSE 250 added 0.1 per cent.

On a slow company news day, gains were driven by battered life insurers, banks and miners . But airline stocks tumbled again with Aer Lingus owner IAG falling 3 per cent, while EasyJet shed 6 per cent.

British bicycles and car parts retailer Halfords soared 24 per cent to a ten-month high, boosted by the UK government’s announcement that people should consider cycling to work when the lockdown is eased.

The blue-chip FTSE 100 has now recovered about 20 per cent from a March low on a raft of global stimulus, but it remains about 27 per cent down on the year as the outbreak halts supply chains, crushes consumer spending and puts entire sectors on the verge of collapse.

Europe

The Stoxx Europe 600 Index ended 0.4 per cent lower.

Basic resources fell the most among industries, reversing early gains. ArcelorMittal tumbled 16 per cent after the steelmaker said it will raise about $2 billion in shares and convertible notes to cut debt and bolster its financial position.

The OMX Copenhagen 25 Index turned positive for the year, the first among European stock benchmarks to reverse steep losses triggered by the spread of the virus, helped by pharma shares including Novo Nordisk.

New York

The S&P 500 and Dow Jones Industrials gave back some of last week’s gains on Monday, as investors worried about the possibility of a second wave of coronavirus infections.

The battered S&P airlines index declined 4.6 per cent, while cruise operators Carnival and Norwegian Cruise Line fell 3.3 per cent and 6.5 per cent, respectively.

Marriott International shed 6.1 per cent after the hotel operator’s quarterly profit fell short of already drastically lowered expectations as bookings plunged.

The Nasdaq, however, edged higher as gains for tech-related stocks helped it build on a rally last week where it recovered all its 2020 losses on hopes of a pickup in business activity.

Drug distributor Cardinal Health jumped 5.2 per cent as the pandemic drove a surge in third-quarter sales, which topped market estimates.

Athletic apparel maker Under Armour slumped 11.1 per cent after it forecast a 50 per cent to 60 per cent drop in second-quarter revenue.

– Additional reporting: Reuters