Stocks stumble on sour Brexit mood and faltering US tax plan

In Dublin, Bank of Ireland drops after adding more customers to tracker compensation list

Traders  in NYSE, November 9th, 2017. Photograph: Reuters/Brendan McDermid

Traders in NYSE, November 9th, 2017. Photograph: Reuters/Brendan McDermid

 

Broad equity market declines in Asia and Europe and a lower open on Wall Street threatened to spoil the longest winning streak for MSCI’s global stock index since 2003. Japan’s Nikkei index saw a wild 2 per cent swing after hitting its highest since 1992 and Europe’s main indexes were firmly in the red as tech and commodity stocks tumbled and as Brexit talks resumed amid low expectations in Brussels.

In the US, technology stocks dragged down indexes amid scepticism over a Republican tax overhaul plan.

DUBLIN

The Iseq index dropped 41 points to 6,92, roughly mirroring declines elsewhere. Bank of Ireland, which announced that an additional 6,000 of its customers would be compensated as part the tracker mortgage scandal, saw its shares drop 1.3 per cent to €6.46. AIB, which is also embroiled in the scandal, saw its shares fall 0.6 per cent to €5.06 per cent while Permanent TSB held steady at €2.02.

Elsewhere Swiss Irish food giant Aryzta fell nearly 1 per cent to €25.09 after it emerged its new non-executive director, Jürgen Steinemann, was the subject of an insider trading investigation involving retail group Metro.

Ryanair traded down marginally at €16.96 after it emerged the budget airline was suing three pilots over an email it says falsely inferred the airline had misled investors, facilitated insider dealing in shares by management and was guilty of market manipulation.

LONDON

Heavy losses from luxury group Burberry weighed on Britain’s top share index on Thursday which hit a two-week low as investors showed anxiety about the retail and housebuilding sectors.

Britain’s blue-chip FTSE 100 index sank 0.6 per cent, slightly outperforming a sharp slump in European stocks, while mid-caps dropped 1.1 per cent. Burberry fell 9.4 per cent, its biggest one-day loss since September 2012, on the high cost of its plans to move even more upmarket by focusing on leather goods and fashion and cutting sales to non-luxury stores.

Marks & Spencer fell 2.4 per cent, while small-cap department store Debenhams sank 6.9 per cent. Housebuilders also suffered, with shares in Persimmon, Taylor Wimpey and Barratt Developments falling by 2.8 per cent to 3.9 per cent after a survey showed house prices in Britain were no longer rising. Weak results added to price pressures for mid-cap builder Redrow, which was down 6.6 per cent. Bovis Homes, Crest Nicholson and Bellway fell 4.9 to 5.7 per cent.

EUROPE

Europe’s main bourses were firmly in the red following a tumble from tech and commodity stocks and as Brexit talks resumed amid low expectations in Brussels. There were a series of ECB speeches and buoyant new growth forecasts from the European Commission, though bond markets were mostly quiet following a rally this week in benchmark US Treasuries and Bunds.

NEW YORK

Wall Street dropped on Thursday, weighed down by losses in Apple and other technology stocks as investors turned their attention to a US Senate Republican plan that could delay corporate tax rate cuts expected by investors. The S&P 500 has risen about 21 per cent since the election of President Donald Trump a year ago, fuelled by his promises to cut corporate taxes and other business-friendly measures.

Seven of the 11 major S&P 500 sectors fell, with the technology index’s 1.31 per cent loss leading the decliners. Apple, Microsoft, Alphabet, Oracle and Facebook weighed more on the S&P 500 than any other companies. Technology has been the best performing S&P 500 sector so far this year with a 37 per cent rise, despite concerns of stretched valuations. Roku soared 49 per cent after the video streaming device maker’s quarterly results and guidance beat expectations. Macy’s jumped 13.89 per cent after the department store operator’s profit came in above expectations. Dish Network rose 3.8 per cent after the satellite and internet TV provider added subscribers in the United States in the third quarter and reduced the rate at which it lost existing customers.

– Additional reporting Reuters/Bloomberg