Stocks slump on concern over Covid-19 resurgence

Iseq closed 2.88% lower in line with European peers

European stocks slumped to a one week-low on Wednesday as a surge in coronavirus cases and news that US was weighing tariffs on European products dashed investors’ hopes of a speedy economic recovery.


The Iseq all-share index slipped 2.88 per cent on the day, a performance that was in line with its European peers.

The banks were among the biggest losers with investors now getting used to significant swings. AIB fell almost 7 per cent to €1.05 while Bank of Ireland dropped 6 per cent to €1.75.

Stocks with a negative exposure to the crisis again fell. Hotel group Dalata dropped 9.5 per cent to €2.80, a more than 14 per cent fall in the past two days. Ryanair, which started the day higher, closed down 6 per cent at €10.73 in line with its rivals EasyJet and IAG.


Insurer FBD fell just 0.6 per cent to €6.76 after it said it had set aside €22 million in case it loses a test challenge in relation to its business interruption policies. The company also said that it was scrapping its planned investor vote on its final dividend of €34.9 million, or €1 per share.

Elsewhere, Hostelworld rose 4.55 per cent to 92 cent on the day. In a statement after the market closed, the company said it expects net revenues this year to fall by 80 per cent as it set out plans to raise money.


The blue-chip FTSE 100 closed down 3.1 per cent and the domestically focused FTSE 250 dropped 2.8 per cent with financial, energy and consumer stocks among the biggest drags.

Builder Crest Nicholson slumped 18.2 per cent for its biggest one-day drop in three months after forecasting a 60 per cent to 70 per cent slide in its annual adjusted pretax profit due to coronavirus-led disruptions.

Oilfield services provider Petrofac Ltd slid after taking its first-half trading was hit by the pandemic. But Naked Wines and Mr Kipling cakes maker Premier Foods shot up as they posted upbeat results due to a boost in demand during the lockdown.


The pan-European Stoxx 600 closed 2.8 per cent lower, recording its second worst fall this month. Economically sensitive cyclical sectors such as travel & leisure, automakers, oil & gas and banks led declines, falling between 3.7 per cent and 4.7 per cent.

Germany’s DAX slumped 3.4 per cent even as the Ifo institute’s survey showed the strongest rise ever recorded in the country’s business morale in June.

The top decliner on the Stoxx 600 was scandal-hit Wirecard, which plunged 28.3 per cent after a slew of negative reports.

Among the few bright spots, Austrian sensor maker AMS rose 6 per cent after JPMorgan upgraded the stock to "overweight" from "neutral", while Dialog Semiconductor jumped 6.4 per cent after raising its quarterly revenue outlook.

Sweden's Evolution Gaming Group fell about 6 per cent after it offered to buy NetEnt for 19.6 billion Swedish crowns (€1.86 billion). NetEnt's shares jumped 33 per cent.

New York

Wall Street’s three major indexes tumbled on Wednesday as its fear gauge, the CBOE volatility index, rose 3.4 points to 34.74.

Battered US airlines, resorts and cruise operators fell again, with the S&P 1500 airlines index down 5.1 per cent. Royal Caribbean Cruises slided 9.5 per cent and Norwegian Cruise Line Holdings 10.3 per cent. Carnival also declined 9.3 per cent as ratings agency Standard & Poor's downgraded its bonds to junk status, forecasting continued weak demand for the cruise industry.

Bank stocks, which tend to outperform when the outlook for the economy improves, slipped about 2.9 per cent.

On the other hand, Dell Technologies jumped 7.4 per cent after a report said the company was considering spinning off its roughly $50 billion stake in cloud computing software maker VMware. – Additional reporting: Reuters

Peter Hamilton

Peter Hamilton

Peter Hamilton is a contributor to The Irish Times specialising in business