China woes spook markets for a second day

The Iseq in Dublin closed down 2.7 per cent on a chastening day for European stock markets. Bourses around the continent extended the week’s sell-off after China allowed the yuan to weaken further, hitting export-focused stocks.

China is the biggest buyer of EU goods after the United States and its surprise devaluation this week has heaped market pressure on European makers of cars, luxury goods and consumer products. Only 37 stocks out of the 600 on the Stoxx Europe 600 were in positive territory.

Britain's top share index was also dragged 1.4 per cent lower by Unilever and mining companies after the China currency jitters pulled down metals prices. US shares had started to recover some ground by the afternoon.

DUBLIN

Paper and packaging company

Smurfit Kappa

was the most traded company on the Iseq yesterday, with €74 million worth of its shares changing hands throughout the day. It is particularly sensitive to global economic news and finished the day down 4.74 per cent to close at €26.05.

Other big Irish corporates with a stake in the Chinese market also suffered. Kerry Group finished the day down 3.26 per cent while Glanbia, which owns milk-processing plants in China, fell 0.8 per cent.

Travel software company Datalex, whose clients are global airlines such as Air China, fell 2.4 per cent.

Dalata, the hotel company run by former Jurys boss Pat McCann, was one of the few Irish stocks to creep into positive territory. It closed up a quarter of a per cent after an industry report highlighted the burgeoning conditions for the Dublin hotel market.

LONDON

Consumer goods giant

Unilever

declined 4.3 per cent after

Goldman Sachs Group

recommended selling the stock.

Several British-listed miners were hit by the currency situation in resource-hungry China. Glencore slumped 5.7 per cent, leading a gauge tracking UK miners near its lowest level since 2009.

Luxury-goods maker Burberry Group fell 3.5 per cent. HSBC Holdings and Vodafone also lost more than 2 per cent.

Balfour Beatty added 3.9 per cent after saying its shortfall for the first half of the year was in line with the range indicated in July. Randgold added 5.4 per cent, one of the few risers on the blue-chip index, as the devaluation of the yuan supported gold prices.

In mid caps, Zoopla climbed 4.7 per cent. The property website said it was winning back agents after months of losing listings to rivals and expects the number of branches using the site to grow further.

EUROPE

Shares of consumer goods company

Henkel

sank 9 per cent after it saw a slowdown in organic revenue growth at its adhesives business. The company said it remained optimistic for its business in China.

German carmakers Daimler and BMW were down 3.7 to 5 per cent, while luxury goods group LVMH was down 5.5 per cent.

Geberit lost 6.4 per cent after the Swiss manufacturer of bathroom piping posted worse-than-forecast sales.

NEW YORK

Apple

, for whom China is a key growth market, fell 3.4 per cent early in the day, before reversing course to trade up 1 per cent to $114.64 by early afternoon.

Tiffany and Coach declined at least 4.3 per cent to pace a 1.2 per cent retreat in consumer discretionary companies, amid concerns China's weakening economy could dent sales.

Alibaba fell as much as 8.2 per cent to an all-time low of $71.03 after the retailer's revenue growth slowed. Yahoo, which has a 15 per cent stake in Alibaba, fell 5.3 per cent.

Nike declined 2.3 per cent, the most in six months. More than 22 per cent of its revenue in the May-ended quarter came from China and other emerging markets. – (Additional reporting: Bloomberg/Reuters)