Brexit-sensitive stocks fall as no-deal fears grow

Renewed fears of a hard Brexit hit some Irish and many British stocks, while US investors remained wary as the country's trade war with China dragged on.

Dublin

Low-cost carrier Ryanair shed 1.64 per cent to €8.74 as Brexit worries hit airlines generally. Banks also suffered. AIB shed 1.4 per cent to €2.256 while Bank of Ireland dipped 0.3 per cent to €3.44.

Housebuilder Glenveagh closed 3 per cent off at 61.6 cent, while its rival Cairn Homes remained flat at €1.006. Insulation and building materials specialist Kingspan shed 3.65 per cent at €40.68.

Multinational cement and concrete maker CRH, the index heavyweight, dipped 0.92 per cent to €29.23.

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London

Shares in Thomas Cook slumped after the debt-laden travel group announced a $1.1 billion rescue plan by Chinese player Fosun Tourism that will wipe out the London-listed company's shareholders.

The bailout will leave Fosun with 75 per cent of Thomas Cook’s main holiday business and about 25 per cent of its airline division, while lenders will hold the balance of the group. Its shares collapsed as much as 19 per cent following the news yesterday, but recovered slightly to close 16.64 per cent down at 5.902 pence sterling. Thomas Cook’s value has shrunk by more than 90 per cent over the past 12 months.

Brexit-sensitive stocks fell as fears that the UK would crash out of the European Union without a deal grew after British premier Boris Johnson said he would suspend the country's parliament next month.

Aer Lingus and British Airways owner International Consolidated Airlines Group (IAG) shed 1.4 per cent to close at 416.7p. Dealers noted the stock was sensitive to consumer spending, which many believe will suffer in a "hard" Brexit. Low-cost carrier EasyJet shed 2.7 per cent to 944.8p.

Housebuilders suffered for same reason. Persimmon fell 2.85 per cent to 1,875p. Rival Barratt declined 3.43 per cent to 625p while Taylor Wimpey, one of British residential building's best-known names, tumbled 3.57 per cent to 143.10. Markets fear that Brexit will hit investment in construction.

Savings and loan provider Prudential, which has a big Asian exposure, fell 1.6 per cent to 1,326p, its lowest since November 2016, amid continued worries about damage to its business in Hong Kong due to the protests in the former British territory.

Miner Anglo American gained 1.61 per cent to 1,717.6p despite reports that profits at its De Beers diamond unit were down 30 per cent on declining sales.

Europe

Germany’s trade sensitive Dax ended lower, but bank-heavy Madrid stocks finishing in the positive territory.

Milan stocks ended flat, reversing earlier losses as Italy appeared to be nearing the end of its latest political turmoil with the opposition Democratic Party (PD) saying it was ready to form a coalition with the 5-Star Movement.

A majority of European subsector indices fell, with technology stocks down 1 per cent after a forecast cut from US software company Autodesk.

Danish companies were at extreme ends of the Europe-wide Stoxx 600 index. Brewer Royal Unibrew was up 10 per cent on higher-than-expected second-quarter results and an upbeat outlook, but jeweller Pandora slumped 6 per cent after Tiffany & Co warned of the potential impact from ongoing protests in Hong Kong.

New York

US stocks recovered from early losses on Wednesday, helped by financial stocks, although investors were guarded as worries about a recession loomed and trade tensions between the United States and China dragged on.

Technology stocks dipped 0.06 per cent, pressured by declines in shares of Microsoft and Autodesk. Shares of the AutoCAD software maker slid 8.1 per cent, the most on the S&P 500, after the company cut its full-year earnings forecast.

Shares of Tiffany & Co rose 2.8 per cent after the luxury jeweller reported quarterly earnings above analysts’ estimates. – Additional reporting Reuters