Eurostoxx:2,237.33 (-2.83%) Paris CAC:3,193.89 -(2.14%) Frankfurt DAX:6,630.02 (-1.90%)
EUROPEAN STOCKS declined yesterday, paring their weekly advance, as the yield premium for Spanish benchmark bonds over German bunds surged to a record.
Oil prices fell for the first time in eight days, while the dollar strengthened to a two-year high against the euro and US equities slid for the first time in four days.
DUBLIN
THE ISEQ closed about 1 per cent lower yesterday at 3,206. After holding up reasonably well in the morning, Irish stocks were knocked back down in the afternoon as buyers disappeared.
“From a macro point of view it hasn’t been a good day,” a Dublin trader said. Spain’s fiscal problems, and resultant fears for the euro area, reverberated around markets globally, he added.
The Dublin market was relatively quiet in terms of stock-specific news, although industrial group DCC climbed more than 1 per cent, or 28 cent, to €19.82 on the back of a relatively positive quarter one interim management statement.
Insulation specialist Kingspan managed to hold on to very small gains, and closed five cent up at just under €6.81.
However, the majority of other Irish stocks finished in the red.
Food ingredients company Kerry Group shed about 2.6 per cent, or 95 cent, to €36.00.
Paddy Power reversed the previous day’s gains, slipping back by almost 2 per cent, or €1.06, to €53.67.
Exploration company Providence Resources gained about 1.7 per cent, or 14 cent, to €8.40 after announcing that pre-drilling activities at its Spanish Point, Co Clare, gas condensate discovery had begun. The discovery is situated in the main Porcupine Basin, about 200km off the west coast.
Overall, volumes were fairly thin yesterday, which one broker attributed to a combination of holidays and a “fear factor” relating to Europe’s woes. A huge number of players are on the sidelines, he said. “Share price movements are exacerbated due to the low volumes.”
LONDON
A MULTI-BILLION euro bailout for Spain’s banks was not enough to appease traders’ concerns over the embattled country, as the London market closed 1 per cent lower.
The FTSE 100 Index closed down 62.4 points at 5,651.8, as Spain’s borrowing costs remained in bailout territory at more than 7 per cent despite the country receiving approval for a €100 billion rescue package for its banks.
Banking stocks were among the worst hit, given fears over their exposure, with Barclays down 5p at 159.3p, HSBC off 16.2p to 533.2p and part-nationalised Royal Bank of Scotland slipping 7.6p to 204.7p.
Disappointing first-quarter figures from Vodafone added to the rout. The mobile phone giant suffered a 2 per cent drop in shares – down 3.1p to 180p – after posting a 7.7 per cent fall in reported revenues.
Connemara Mining rose more than 2 per cent to 10.75p after announcing a joint venture with Teck Ireland on its Oldcastle block of drilling licences in Cavan and Meath.
EUROPE
THE STOXX Europe 600 Index climbed 0.8 per cent to 258.17 this week, for the longest stretch of gains since January 2006, even after falling 1.4 per cent yesterday.
National benchmark indexes rose in 11 of the 18 western European markets this week. Germany’s DAX rallied 1.1 per cent and France’s CAC 40 advanced 0.4 per cent.
Spain’s IBEX 35 fell 6.3 per cent and Italy’s FTSE MIB retreated 4.7 per cent.
ASML surged 9.7 per cent after the chipmaker said second-quarter net bookings climbed 9.8 per cent and that technological advances would boost business in the longer term.
Akzo Nobel jumped 10 per cent. The company reported second-quarter earnings ahead of analyst forecasts, as chief executive Ton Buechner drives ahead with a revamp to improve profitability.
Remy Cointreau increased 6.1 per cent in Paris as France’s second-biggest distiller reported an increase in first-quarter sales that also topped projections.
CSR surged 37 per cent after Samsung Electronics agreed to buy its wireless technology unit for $310 million.
US
US STOCKS declined in early trade yesterday, halting a three- day rally for the Standard and Poor’s 500 Index, amid concern Europe’s debt crisis is worsening and as commodities slumped on news China will not relax property control policies.
Bank shares, sensitive to signs of trouble in Europe, were among the biggest losers.
The KBW bank index fell 1.9 per cent, taking its weekly decline to 2.3 per cent.
Shares in Morgan Stanley fell 3.5 per cent to $12.78.
Xerox fell 4.4 per cent to $6.87 after cutting its full-year profit forecast, as it braces for tough economic conditions in Europe. – (Additional reporting Bloomberg/ PA)
