European stocks snapped a six-day winning streak on investor concern that the European Central Bank is moving toward tightening monetary policy.
The Stoxx Europe 600 Index fell 0.6 per cent, to 344.2, at the close of trading, after earlier losing as much as 1.2 per cent.
Optimism had been tentatively returning, with the equity benchmark posting six straight days without losses, after euro zone economic data began beating forecasts again and concern over lenders eased.
But the fragile sentiment was dented after Bloomberg News reported that an informal consensus was building in the ECB to gradually rein in quantitative easing.
DUBLIN
The Iseq ended the day 46 points down, at 6,019, reflecting trends elsewhere in Europe.
Permanent TSB was one of the strongest movers, jumping 4 per cent to €2.29 after it emerged that US private-equity firm Cerberus has been selected as preferred bidder for the bank's remaining £2.5 billion (€2.8 billion) of UK buy-to-let loans.
Agri-services group Origin, meanwhile, rose 6.3 per cent to €6.11, one of its strongest one-day rises, after Brussels agreed to lock in an element of the Common Agricultural Policy, which will bolster farmers' incomes.
Dalata rose marginally to €4.20, retaining gains forged over the past week. Shares in the hotel group were buoyed by the news it had agreed to lease the old Burlington hotel in Dublin, which currently trades as Doubletree by Hilton.
Bank of Ireland traded up at 18.3 cent, which was roughly in line with other financials, while Ryanair was marginally down at €11.89.
LONDON
Tesco shares soared to one-year highs on Wednesday, but the London stock market remained under pressure amid reports that the ECB could pare back its easing programme. The FTSE 100 closed 41.1 points lower, at 7033.25, after nearing a record high a day earlier.
Tesco shares failed to prop up the market, despite jumping more than 9 per cent, or 18.4p, to close at the highest level in more than a year at 207.1p. The supermarket reported a 0.9 per cent surge in UK like-for-like sales in the second quarter and unveiled a three-year plan to get profits back on track.
Aviva shares rose 5.8p to 453.4p, despite being slapped with an £8.2 million fine by the Financial Conduct Authority (FCA) linked to the protection of client assets.
The other big risers on the FTSE 100 were Marks and Spr Group, up 8.8p at 337.7p; Anglo American up 24.p at 1011p, and Barclays up 3.2p at 172.45p.
The biggest fallers were Polymetal International, down 53p to 875p; United Utilities Group, down 43.5p at 951p; Randgold Resources, down 290p at 7,040p; and Intu Properties, down 10.8p at 290p.
EUROPE
The volume of shares changing hands on the Stoxx 600 was about 15 per cent higher than the 30-day average. Banks, which have lagged the market this year amid concern that lower interest rates were crimping profits, bucked the trend to rise, led by Italian lenders.
Unione di Banche Italiane and Banca Popolare dell'Emilia Romagna advanced 4.8 per cent or more. Deutsche Bank, which has lost nearly 50 per cent of its value this year, extended gains into a fifth day (the longest winning streak in eight weeks) as fears that it may need to raise capital abated.
Banks helped Italy’s FTSE MIB rise 0.8 per cent, for the best performance among major western European markets.
Among stocks moving on corporate news, SFR Group fell 5.3 per cent as Altice terminated an offer to buy the rest of its telecom unit after France's financial markets regulator said it was opposed to the plan.
NEW YORK
Wall Street rose for the first time in three days on Wednesday, powered by gains in financial and energy shares. Activity in the US services sector saw a big rebound in September, after having slowed to more than a six-year low in the previous month, a report from the Institute of Supply Management showed.
The S&P financial sector rose 1.46 per cent to more than a three-week high. Wells Fargo and Bank of America rose 2.5 per cent and were the top influences on the benchmark S&P 500 index.
Deutsche Bank's US-listed stock was up 1 per cent, while its Frankfurt-listed shares rose 2.6 per cent. Exxon Mobil was up 0.6 percent and Chevron 0.9 per cent. Chesapeake Energy rose 5.8 percent and was the biggest gainer on the S&P.
The high-dividend paying sectors – telecom services, consumer staples and utilities – were the worst hit. Twitter rose 4.4 per cent after the Wall Street Journal reported that the micro-blogging website is expected to field bids this week.
– (Additional reporting Reuters/Bloomberg)
