Global equity prices ticked lower on Tuesday as investors took stock of some disappointing US earnings reports and signs that Britain’s decision to leave the EU could hurt other economies. The US dollar rallied to a four-month high.
The MSCI world equity index, which tracks shares in 45 nations, was down 0.38 per cent, while Europe’s broad FTSEurofirst 300 index suffered its worst day in nearly two weeks.
It was all quiet on the trading front in Dublin with thin volumes and as investors await reporting season to kick in.
The Iseq index of leading shares closed down 16.97 points to 4,602.71, led by Independent News and Media, down 3.8 per cent to 12.5 cent.
Iseq heavyweight CRH closed flat after data showed US highway contracts awarded fell year-on-year in June. Bank of Ireland was also unchanged at 18.6 cent after Moody's warned about its pension deficit earlier in the week.
Kingspan was up 1 per cent to €21.70 after one of its peers issued an upbeat trading statement.
Other movers of the day included hotels group Dalata, which was 3.5 per cent lower at €3.70, Ryanair, down 1.5 per cent to €11.52, and Smurfit Kappa, up 1.5 per cent to €21.35.
Britain’s top share index steadied on Tuesday, easing back from an 11-month closing high, with mining stocks dropping after a production update from Rio Tinto.
Britain’s FTSE 100 was flat in percentage terms at 6,697.37 points at its close, after ending Monday at its highest since August last year. Rio Tinto’s decline was among the largest; it fell 5 per cent after its latest update. Traders said that Rio Tinto’s second-quarter figures were a little disappointing, even as it reiterated its 2017 outlook.
Top riser on the FTSE 100 was Coca-Cola HBC, up more than 3 per cent after the bottling company was upgraded to “overweight” from neutral by JP Morgan Cazenove.
Declines in miners dragged European stocks down from a three-week high on Tuesday, while the earnings season picked up pace.
Chemical producer Akzo Nobel slid 4.3 per cent after its sales missed analyst forecasts.
Fiat Chrysler fell 3.4 per cent after saying it is under investigation by US authorities over how it reports sales.
Ericsson lost 5.6 per cent after its quarterly revenue trailed estimates.Some stocks bucked the overall market trend: Zalando surged 22 per cent however after the German online apparel retailer reported quarterly profit that beat analysts' estimates and raised its full-year margin forecast.
Elsewhere, Telenor gained 4.4 per cent after saying that it won't bid in a upcoming spectrum auction in India, signalling a rethink on an investment strategy that has prompted investor concerns.
The S&P 500 and the Nasdaq were lower on Tuesday, weighed down by Netflix and health insurers, but the losses were offset on the Dow by Johnson & Johnson's strong results. Also weighing on sentiment was the IMF's move to cut its global growth forecasts for the next two years due to uncertainty over Britain's looming exit from the European Union.
J&J shares rose 2.1 per cent to a record high of $125.75, after the company's profit topped estimates and it raised its forecast for the year. Health stocks, which were higher at the open on J&J's results, dropped 0.3 per cent, led by health insurers after a report said US antitrust officials would file lawsuits to block Anthem's acquisition of Cigna and Aetna's takeover of Humana. The stocks were down between 2 per cent and 5 per cent.
Netflix slumped 14 per cent to $85.09 after its quarterly subscriber numbers and forecast missed estimates. It weighed the most on the Nasdaq and the S&P 500.
Although Goldman Sachs’ profit beat estimates, the stock dropped 1 per cent, which some analysts said was due to the profit beat not being as impressive as those of its peers.
Additional reporting: Reuters/Bloomberg