US-Sino tensions drag global markets into the red

Rising tensions between the United States and China, as well as fresh concern over Covid-19 cases, pushed markets around the world into the red on Friday.

Dublin

Euronext Dublin outperformed many of its European peers but still finished the day down 1.3 per cent.

“It was red across the board,” noted one trader, who pointed to the escalation in US-Sino tensions after Beijing ordered the closure of a US consulate in south-western China in response to an American demand earlier this week for the closure of the Chinese consulate in Houston, Texas.

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Many Irish stocks picked up gains in the closing stages of trading on Thursday off the back of the Government’s €7.4 billion stimulus plan.

"That helped push the likes of homebuilders Cairn Homes and Glenveagh Properties up at the close on Thursday, finishing up 3 to 4 per cent," noted a trader. "They gave up some of those gains today." Cairn Homes was down 2.2 per cent, while Glenveagh Properties shed 4 per cent.

Dalata was "another significant underperformer", ending the day down 4 per cent after picking up 2 per cent following publication of the stimulus plan on Thursday.

News that Aer Lingus owner IAG is to issue shares at the end of the summer in a bid to raise up to €2.5 billion to keep the business afloat dragged airlines down. “They all had a really tough day,” said a trader.

IAG was down nearly 5 per cent on the day, while low budget carrier Ryanair was down 2 per cent, and its peer Easyjet was down 4 per cent.

Irish banks "were quite muted" with AIB down 1 per cent and Bank of Ireland down 1.8 per cent.

Elsewhere, building material groups CRH ended the day down nearly 2 per cent, while packaging company Smurfit Kappa was down 1.7 per cent.

Some of the food and drinks companies also struggled with Glanbia and C&C each down 2 per cent, while Greencore ended the day down 1 per cent.

London

British shares fell as the blue-chip FTSE 100 ended down 1.4 per cent, with all sectors trading in the red. The index fell 2.6 per cent for the week, while the mid-cap FTSE 250 shed 1.3 per cent, and edged lower for the week.

Ladbrokes owner GVC Holdings underperformed its peers on the FTSE 100 for the week as British tax authorities expanded an investigation into the gambling company's former online business in Turkey.

British Gas owner Centrica surged more than 16 per cent after it announced plans to sell its North American subsidiary Direct Energy for $3.63 billion.

Europe

European shares posted their biggest session drop in a month over the tensions between the US and China, with all sectors trading in the red.

The pan-European Stoxx 600 index fell 1.7 per cent, pushing it to a weekly loss for the first time in four weeks. Increasing Covid-19 cases also weighed as investors worried containment moves may reverse an economic pick-up. Germany’s DAX slumped 2 per cent.

British Gas owner Centrica surged 16.8 per cent to post its best session in two decades, as it announced plans to sell its North American business Direct Energy to NRG Energy for $3.63 billion.

In earnings, Equinor climbed 4.6 per cent as a strong performance from its refinery and trading business helped the group beat forecasts for a loss. A 62 per cent jump in second-quarter net profit saw lighting maker Signify jump 5.7 per cent.

New York

Technology stocks dragged Wall Street’s main indexes lower on Friday, putting the S&P 500 on track to erase all of its gains for the week.

High-flying companies Apple and Microsoft, which were pivotal in driving the stock market's recovery in recent months, fell 0.5 per cent and 0.3 per cent respectively. The S&P technology index dropped 0.8 per cent.

Intel tumbled 15.3 per cent after the company said it was six months behind schedule in developing next-generation, power-efficient chip technology and that it would consider farming out more work to outside semiconductor foundries.

Rival Advanced Micro Devices gained 13 per cent, but the broader Philadelphia semiconductor index dropped 0.7 per cent. (Additional reporting: Agencies)