Iseq slumps to lowest since Brexit referendum as key vote delayed

Dublin's Iseq index slid to its lowest level since immediately after the Brexit referendum, as fears mounted over the prospect of the United Kingdom crashing out of the European Union without a deal after the country's prime minister, Theresa May, delayed a key parliamentary vote.

Wider European markets were also rattled by growing political unrest in France, following a fourth weekend of anti-government protests and violence on the streets of Paris and other major cities, as well as concerns over global growth and US-Chinese trade tensions.

DUBLIN

The Iseq index fell by 2.5 per cent to 5,409.17, its lowest closing level since UK voters decided in June 2016 to quit the EU. All told, some €5.2 billion has been wiped off the Irish market over the past five sessions.

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Brexit-sensitive stocks were out of sorts as sterling fell as much as 1.6 per cent against the euro, to 90.87p. Ryanair fell 5.2 per cent to €10.56, while Paddy Power Betfair dropped 4.2 per cent to €69.35, and Irish Continental Group lost 3.2 per cent to €4.32.

Dalata Hotel Group declined by 2.2 per cent to €4.31, even though analysts at Cantor Fitzgerald said that the stock was already pricing in a lot of bad news.

LONDON

Some internationally exposed stocks such as British American Tobacco and GlaxoSmithKline were lifted by sterling weakness but their gains were more than offset by a broad sell-off led by companies more exposed to the domestic economy.

Financials were the biggest drag on the FTSE with domestically focused banks Royal Bank of Scotland and Lloyds falling 2.1 and 3 per cent respectively.

House builders, which are also highly sensitive to Brexit developments, were down sharply as tension built and analysts at Peel Hunt cut their ratings and price targets.

Shares in Berkeley Group, Persimmon, Taylor Wimpey and Barratt Developments fell between 3.5 and 5.1 per cent.

Centrica fell 4.6 per cent, with it partly hurt by a Sunday Telegraph report that the owner of Britain's largest energy supplier British Gas could struggle to pay dividends.

Interserve plunged 53 per cent to fresh record lows.

EUROPE

The pan-European STOXX 600 ended the session down 1.8 per cent at a new two-year low. All European bourses took strong hits with Germany’s DAX and France’s CAC 40 down 1.5 per cent.

"France, Brexit UK, Italy, even Germany soon-under-new-leadership – there is no political visibility in Europe, " Kepler Cheuvreux strategist Christopher Potts wrote in a report published ahead of the Brexit vote being postponed. "For international investors European equity has become virtually un-investable, unless and until it becomes extremely cheap."

Adding to the gloom, oil stocks fell 2.4 per cent, erasing their 2018 gains. Shares in BASF fell 3.8 per cent after the German chemicals firm slashed its forecast for 2018 profits on Friday.

NEW YORK

US stocks remained volatile as the market took a dive in early trading only to erase those losses later and end slightly higher. The Dow lost as much as 507 points in early trading before ending with a gain of 34.

Energy companies fell as the price of crude oil dropped 3 per cent, giving back its gains from last week. Banks fell as investors expected slower increases in interest rates.

Tensions between the US and China kept climbing following the detention of Huawei chief financial officer Meng Wanzhou, who is suspected of trying to evade US trade curbs on Iran.

The S&P 500 index gained 4.64 points, or 0.2 per cent, to 2,637.72, and the Dow added 34.31 points, or 0.1 per cent, to 24,423.26, while the Nasdaq rose 51.27 points, or 0.7 per cent, to 7,020.52. – Additional reporting, Reuters, Bloomberg