Bank and car stocks pull markets down

European stocks declined on Wednesday, breaking their biggest back-to-back gains in two weeks, as banks and carmakers fell. Investors held off as the World Bank cut its predictions for global economic growth this year to 2.4 per cent from 2.9 per cent.

DUBLIN

The Irish market reflected what was happening in Europe. Traders said the volume of shares traded on the day was below average.

Index heavyweight and building materials giant CRH added 1.07 per cent to close at €27.34, but its performance failed to lift the overall market as other leading stocks drifted.

Airline Ryanair was down 1.23 per cent at €13.70 on general market weakness. International packaging group, Smurfit Kappa was off 1.39 per cent at €23.42. Food group Kerry slid 2.4 per cent to closet at €80.03. Paddy Power Betfair tumbled 1.51 per cent to end the day at €120.80.

Permanent TSB bucked the trend, climbing 3.52 per cent to close at €2.208 after Minister for Finance Michael Noonan suggested it could merge with a rival. The closing price reflected the higher end of the range in which it traded on Wednesday.

The mortgage lender's stock slumped amid fears about the potential impact on its margins of political pressure to cut interest rates. In the same sector, Bank of Ireland fell 3.75 per cent to 25.7 cent.

LONDON

London’s top flight index edged into positive territory after mining stocks surged on the back of strengthening commodity prices and a lift in copper on figures showing China’s strong demand for the metal last month.

Mining giant Anglo American was the biggest riser, up nearly 5 per cent to 697.5 pence sterling, while Fresnillo also climbed 48p to 1197p. Royal Dutch Shell and BP rose 43.5p and 1808p and 3.3p to 376.6p respectively.

Supermarket giant Sainsbury’s was up 3.9p to 250.6p after reporting a 0.8 per cent fall in like-for-like sales in its first quarter to June 4th. This marked a setback after a 0.1 per cent rise in the previous quarter, but was better than feared following recent disappointing market share data from Kantar Worldpanel.

Falls among banking stocks and insurers weighed on the top tier, with Royal Bank of Scotland, down 4.3p to 225.4p. Barclays and Prudential were also lower, off 2.2p to 178.1p and 6p to 1316p respectively.

WH Smith was 4 per cent lower in the FTSE 250 Index as it reported flat sales in the 14 weeks to June 4th, as buoyant trade across its shops in railway stations and airports was offset by tougher high street trading.

EUROPE

Spanish and Italian lenders slid, with UniCredit and Banco Popular Espanol down at least 4 per cent.

Erste Group Bank retreated 3.8 per cent after one of its holders sold a stake. French payments processor Ingenico Group slid 7.2 per cent after peer VeriFone Systems cut its annual earnings and revenue forecasts.The Stoxx Europe 600 Index lost 0.5 per cent at the close of trading.

Volkswagen and BMW lost 1 per cent or more as a strengthening euro dragged on exporters. The World Bank late on Wednesday cut its outlook for global growth and said downside risks had become more pronounced since the start of the year.

Utilities gained, with Engie up 2.6 per cent and Germany’s RWE and EON rising at least 2.8 per cent. Commodity and energy producers also advanced, bucking the trend.

US Wall Street was higher in a narrow trading range early in the afternoon, with the S&P 500 inching towards its all-time high, as oil prices hit 2016 highs above $50 a barrel.

Railroad operators CSX, Norfolk Southern and Union Pacific were all up about 2.3 per cent. Higher gold prices helped boost miners. Freeport rose 3.5 per cent and Newmont gained 3.8 percent.

AbbVie fell 1.9 per cent to $61.85 and was the biggest drag on the S&P, after Morgan Stanley downgraded the stock.