European markets suffer biggest weekly loss since Brexit

European stocks posted their biggest weekly slide since the run-up to the Brexit referendum on speculation the recent rebound might have been overdone.

In a broad-based selloff, the Stoxx Europe 600 Index resumed declines after a brief respite on Thursday.

Concern over the health of Italian lenders and an upcoming referendum in the country, that may lead to the resignation of its prime minister, dragged the Milan market down the most among western-European markets.

The Stoxx 600 retreated 0.8 percent at the close of trading, with almost all of its industries down

DUBLIN

The Iseq Index of Irish shares lost 0.4 per cent to 6,042.89, driven by international market sentiment amid a dearth of local market-moving news.

Banks were out of sorts, with Bank of Ireland down 0.6 per cent at 18.1 cents, while Permanent TSB lost 2.6 per cent to €1.92.

Cantor Fitzgerald analyst Stephen Hall said that news that Bank of Ireland is set to charge corporate and institutional clients negative interest rates from October for deposits greater than €10 million is a reminder of how the "current environment for European banks remains challenged in a lower-for-longer interest rate environment".

Among small-caps, Mincon surged 11.8 per cent to 67 cents after the engineering company released an upbeat set of first-half results.

Independent News & Media fell 3.6 per cent to 13.5 cents after the Audit Bureau of Circulations said the Irish Independent's print circulation fell 6.4 per cent in the first half of the year.

LONDON

Britain’s top shares index fell on Friday to post its worst weekly drop since mid-June as its earlier rally up to 14-month highs stalled, with mining stocks hit by weaker copper prices.

The FTSE 100 ended down 0.2 per cent at 6,858.95 points, taking its total fall for the week to 0.8 per cent. This marked its biggest weekly decline since mid-June, before Britain voted to leave the EU.

Speculation that Britain could formally begin the process of leaving the EU early next year also caused a brief wobble in the FTSE 100. A government spokeswoman said prime minister Theresa May would not invoke Article 50 – needed to trigger the process – before the end of this year.

Mining stocks such as Glencore were the worst performers, with the sector impacted by weaker copper prices.

Shares in oil majors BP and Royal Dutch Shell also dipped as oil prices retreated.

EasyJet, however, rose 2.5 per cent on the back of a media report of takeover interest in the budget airline.

Ryanair's shares failed to benefit from the talk of industry consolidation, falling 0.5 per cent to €11.95 in Dublin.

William Hill climbed 3.9 per cent after the UK's biggest bookmaker said that operating profit for 2016 would be at the higher end of its forecast.

EUROPE

Italy’s FTSE MIB Index stood out as a weak spot, lowing 2.2 per cent, while Spain’s IBEX 35 Index, the third-biggest decliner for the region, slid 1.2 per cent. Prime minister Mariano Rajoy agreed to face a confidence vote in parliament at the end of this month.

Concern that the European Central Bank stimulus programme is hurting profitability at lenders has weighed on their shares all year. An index tracking them has tumbled 27 per cent in 2016, with companies including Deutsche Bank, Credit Suisse Group and Italy's Banca Monte dei Paschi di Siena reaching record lows.

On Friday, UniCredit SpA and Banca Popolare dell'Emilia Romagna tumbled more than 5.5 per cent. Monte Paschi fell 2.6 per cent on reports that its chief executive officer and former chairman are under investigation for false accounting.

Among other stocks moving on corporate news, Royal Vopak slid 7.1 per cent, the most in a year, after the Dutch storage-tank operator reported lower revenue and cashflow.

AP Moeller-Maersk rose 1.9 per cent after saying it's still considering several options in its strategic review after a local newspaper reported that the Danish conglomerate was exploring a two-way split into an energy and a transport company.

NEW YORK

US stocks slipped for the first time in three days in mid-afternoon trading on Friday in New York, with a recent rally showing signs of tiring amid elevated valuations and rising speculation that borrowing costs will increase before year-end.

Investors were selling this year’s winners, with phone companies headed towards their worst week since 2014, while utilities and energy producers also led the retreat.

However, better-than-estimated earnings from farm machinery maker Deere & Co, technology group Applied Materials and Foot Locker helped keep a lid on declines, with shares of the three rising more than 6.6 per cent. Nike Inc. gained 2.8 per cent, boosted by Foot Locker's results.

By mid-afternoon on Wall Street, the S&P 500 Index and Down Jones Industrial Average each fell 0.4 per cent, while the Nasdaq Composite Index slipped 0.2 per cent.

– Additional reporting: Bloomberg, Reuters