EUROPEAN CENTRAL Bank chief Mario Draghi’s failure to deploy a “big bazooka” solution to the euro-zone’s debt crisis yesterday sent markets into decline.
National benchmark indexes fell in 15 of the 18 western European markets, with banking shares bearing the brunt of the sell-off.
The euro strengthened in early trade but slid against the dollar and the yen when Mr Draghi disappointed investors with the lack of a coherent, immediate plan.
DUBLIN
THE ISEQ managed to defy the widespread negativity, finishing more than four points higher at about 3,147.65
Paper and packaging giant Smurfit Kappa continued to benefit from a better than expected set of half-year results released earlier in the week. The stock closed almost 3 per cent higher, or 18 cent, at €6.35.
Paddy Power had a very volatile day’s trading, with its share price moving in a range of about 4 per cent. However, it managed to finish the session in positive territory, almost 2 per cent – or 98 cent – higher at €54.97.
Food stocks generally held up well. Kerry Group added 10 cent ahead of its first-half results which are due out next week, bringing the food ingredients stock to €37.20.
Elsewhere in the sector, bakery group Aryzta rose 45 cent to €40.50.
One trader noted that the Dublin market was very volatile. He said there was “no rhyme or reason” to the sharp swings, except that low holiday-season liquidity leads to greater volatility.
LONDON
UK STOCKS declined, led by a sell-off in financial and mining companies. The benchmark FTSE 100 Index slid 50.52 points, or 0.9 per cent, to 5,662.3 at the close in London after earlier rising as much 0.9 per cent. The broader FTSE All-Share Index also slid 0.9 per cent.
Royal Bank of Scotland, which will report its earnings today, tumbled 5.1 per cent to 204.5 pence.
Lloyds Banking Group retreated 4.3 per cent to 29.39 pence, while Barclays declined 3.6 per cent to 162.3 pence.
Aviva slid 4.7 per cent to 285.2 pence, leading a gauge of British insurers lower. Prudential, the UK’s biggest insurance company by market value, sank 3.6 per cent to 746 pence and Legal and General lost 2.2 per cent to 126.6 pence.
Mining shares fell as base metals slipped on the London Metal Exchange. Antofagasta lost 5.2 per cent to 1,041 pence, Kazakhmys retreated 4.5 per cent to 679 pence and Xstrata dropped 1.7 per cent to 846.7 pence.
BAE Systems lost 1.1 per cent to 309 pence as Europe’s largest defence company reported a 9.8 per cent drop in first- half sales to £8.3 billion, missing the median analyst estimate of £9.1 billion.
EUROPE
MARKETS SOLD off across Europe. In France the CAC 40 Index declined 2.68 per cent, and Germany’s DAX Index retreated 2.2 per cent.
The Stoxx Europe 600 Index fell 1.3 per cent to 259.28 at the close of trade. Banks pulled the index lower, with Santander plunging 6.7 per cent to €4.63 and Deutsche Bank sliding 5.3 per cent to €23.21. Credit Agricole slumped 8 per cent to 3.28.
Veolia plunged 12 per cent to €8.15, the biggest drop in a year. First-half results were hurt by writedowns in Italy, the economic slowdown and a “contractual erosion” at Veolia’s water division in France, said the Paris-based company.
Master Blenders 1753, the beverage business spun off from the former Sara Lee, tumbled 5.6 per cent to €8.95 after saying it would restate earnings because of accounting irregularities and tax provisions at its Brazilian operations.
Deutsche Post, the world’s biggest carrier of air and sea freight by volume, advanced 2.3 per cent to €15.02 after it posted earnings before interest and taxes of €543 million, down from €562 million a year earlier.
US
US STOCKS fell in early trade, putting the S&P 500 on track for its fourth straight drop.
Knight Capital Group shares plunged 51 per cent to $3.40, a day after a computer glitch at the market maker triggered a spike in volatility shortly after the open.
The company said yesterday an erroneous trading position wiped out $440 million of its capital and will force the firm to raise money.
General Motors posted a smaller than expected loss in Europe that helped the number one US automaker post a better-than-expected second-quarter profit. Shares slipped 0.05 per cent to $19.65.
Gap jumped 9.5 per cent to $32.22 after the clothing retailer posted its July and second-quarter sales.
But rival Aeropostale plummeted 31.1 per cent to $13.40 after cutting its second-quarter forecast. – (Additional reporting Bloomberg, Reuters)
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