Spanish concerns push stocks lower

AHEAD OF the May Day public holiday around Europe, markets were quiet yesterday, with volumes at just 74 per cent of the 90-day daily average, with some investors extending their weekend in anticipation of the public holiday.

DUBLIN

WITH MARKETS quiet, the Iseq drifted off into the close, giving up about 0.4 per cent.

DCC extended its gains of recent days, adding 60 cents, or 3.2 per cent, to finish on €19.10, with brokers noting that investors were looking at the stock as a “potential growth story”, following concerns over the mild winter and its impact on its energy division.

Fyffes looked to recover following profit-taking in the stock last week. It added two cents, or 4.1 per cent, to finish the day up at €0.46.

Kingspan was also on the move yesterday, gaining eight cents, or 1 per cent, to advance to €7.88.

In its interim statement, insurer FBD reaffirmed its guidance and pointed to on-going competition in the market. It advanced by 10 cents, or 1.2 per cent, to € 8.70.

Independent News & Media reversed its losses of recent days, adding a cent, or 3.9 per cent, to advance to €0.27, while Paddy Power was also ahead, advancing 50 cents, or 1 per cent, to finish the day up at €49.30.

Following its egm last week, oil and gas exploration company Providence brought its 13 million new shares to the market yesterday.

However, one Dublin broker noted that activity was less than he had expected in the stock, which was off by 16 cents, or 2.3 per cent, at € 6.76.

Fellow explorer Kenmare Resources was particularly weak on the day, losing 4 cents, or 5.9 per cent, to finish down at €0.62.

Index heavyweight CRH was also in the red for most of the day, closing down by 13 cents, or 0.8 per cent, at €15.32.

LONDON

IN LONDON, the FTSE 100 gave up 0.7 per cent amid ongoing concerns over Europe’s crisis. It closed down by 39.33 points at 5,737.78 and ended April down by 0.5 per cent.

Despite a decent start to the quarterly earnings season – of the companies that have reported earnings in the quarter, 58 per cent have either met or beaten expectations, according to Thomson Reuters Starmine data – Europe’s debt crisis continues to weigh on the outlook for corporate earnings.

“A robust Q1 reporting season has helped, but it will soon be over, with focus turning back to macro,” said Mislav Matejka, an analyst at JPMorgan. “We see no reason to close our cautious stance as the key concerns are not abating. In fact, we think they are turning more worrisome.”

Man Group fell 3.3 by per cent ahead of the company’s first-quarter trading update today, as investors feared it may be hit by the latest bout of market jitters.

The stock had risen by more than 10 per cent over the last week on the back of bid speculation.

Banks retreated, with euro zone debt exposure blighting sector sentiment, as investors awaited further news from the reporting season.

Part State-owned lenders Lloyds Banking Group and Royal Bank of Scotland, which will issue Q1 updates later this week, shed 0.6 per cent and 0.3 per cent respectively.

EUROPE

PROBLEMS IN Spain’s economy put the debt crisis to the fore yesterday, with a contagion effect spreading across the continent.

The Euro Stoxx 50 index of euro zone blue chips closed down by 1.6 per cent points yesterday. It lost 8.2 per cent in April, its worst monthly showing since August 2010.

“On a macro front, or political front, in Europe things aren’t looking so great . . . I am cautious in the short term,” James Butterfill, an equity strategist at Coutts said yesterday.

Actelion soared 14 per cent to 38.40 Swiss francs as its experimental lung drug Macitentan met the main goal of a late-stage clinical trial, providing the company with a possible successor to a treatment that accounts for 89 per cent of sale

In Frankfurt, the DAX slipped by 0.6 per cent at the close of trading, as Deutsche Börse gave up 2 per cent after New York-based rival NYSE Euronext reported a decline in profit.

In Paris, the CAC 40 lost 1.6 per cent.

NEW YORK

US STOCKS slipped back in early trading yesterday, with the SP 500 on track for its first monthly decline since November after reports hinted at a stalled US recovery and Spain sank into recession, underscoring nagging euro zone stresses.

US consumers boosted spending only modestly last month and a gauge of midwestern business activity fell sharply in April,suggesting the economy entered the second quarter with less steam.

Banks were among the top decliners after Standard Poor’s cut the credit ratings of 11 Spanish banks. – (Additional reporting: Reuters/ Bloomberg)