Eurostoxx 50:2,335.87 (-0.49%) Frankfurt DAX:6,136.84 (-0.42%) Paris CAC:3,195.97 (-0.46%)
EUROPEAN STOCKS fell from a one-week high yesterday after credit rating agency Fitch said the ECB must do more to prevent the debt crisis from spreading.
Markets were also unsettled by rumours that France’s credit rating might be downgraded overnight.
DUBLIN
The Iseq slid 1 per cent, pulled lower by weaker food stocks.
Bakery group Aryzta was almost 7 per cent lower at the close. That was the largest drop since April 2009 and the worst performance in the Stoxx 600 today. However, brokers explained that this drop was to be expected as the company carried out a share placing yesterday.
FBD was one of the top gainers on the Irish market, jumping more than 4 per cent, or 30 cent, to €7.15 on the back of a very positive broker note issued in the morning.
Grafton Group, which owns the Woodies and Chadwicks hardware chains, gained 2 per cent to €2.55, after reporting yesterday morning that a strong end to the year had boosted its performance.
LONDON
UK stocks declined, led by a sell-off in utilities and energy companies, as investors awaited more debt auctions by euro-area nations.
The benchmark FTSE 100 lost 0.5 per cent to 5,670.82 at the close in London, paring yesterday’s 1.5 per cent advance that was the biggest in a week.
The broader All-Share Index slid 0.4 per cent today.
“Selling pressure has begun to form at the top of the trading range,” said Will Hedden, a sales trader at IG Index in London. “With important euro-zone bond auctions tomorrow from Spain and Italy, it is unsurprising to see markets inch around nervously.” SSE, the UK’s second-largest power producer, dropped 2.8 per cent to 1,264 pence after EDF Energy said it will cut gas prices in the UK by 5 per cent from February 7th following a drop in the wholesale cost of the fuel.
Centrica, the owner of British Gas, slid 1.3 per cent to 283.8 pence. EDF is the first utility in the UK to trim prices following an October call from the Office of Gas and Electricity Markets for “radical” changes in the market.
Centrica, SSE, EON AG, RWE AG and Iberdrola SA, which owns ScottishPower, also supply electricity in the British market.
EUROPE
The Stoxx Europe 600 Index dropped 0.4 per cent to 249.93 at the close of trading, after earlier climbing as much as 0.3 per cent. The gauge has still advanced 2.2 per cent this year as economic reports around the world added to optimism the global economy can withstand the euro area’s debt crisis.
“There is nothing different between the crisis at the end of 2011 and at the beginning of 2012,” said Lorne Baring, managing director at B Capital SA in Geneva, which oversees almost $500 million. “The rally in markets was a search for optimism away from Europe, but at some point it was going to come back onto the table.”
National benchmark indexes declined in 13 of the 18 western European markets yesterday.
Germany’s DAX and France’s CAC 40 lost 0.2 per cent.
Repsol YPF, Spain’s largest oil company, tumbled 5.7 per cent after selling 61 million of its own shares.
Pirelli, Europe’s third-largest tyremaker, lost 4.5 per cent after Goodyear said global tyre demand is weak. Chr. Hansen jumped 9.8 per cent as Novo agreed to buy a 26 per cent stake in the Danish food-ingredient company.
US
US stocks fell in early trade, snapping a two-day advance, amid concern that Europe’s debt crisis will stifle global growth and as the Federal Reserve said that hiring was limited and the housing market remained stagnant last month.
Energy shares had the biggest decline in the Standard and Poor’s 500 Index among 10 groups as Exxon Mobil dropped 1.3 per cent. Urban Outfitters tumbled 17 per cent after its chief executive officer resigned.
Supervalu retreated 11 per cent as earnings at the supermarket chain missed analysts’ estimates.
Citigroup and Bank of America rose at least 3.4 per cent to pace gains among financial companies. The SP 500 declined 0.2 per cent to 1,289.31, paring a loss of as much as 0.5 per cent. The benchmark gauge for American equities rose 1.1 per cent over the previous two days.
The Dow Jones Industrial Average fell 48.97 points, or 0.4 per cent, to 12,413.50 today. The Nasdaq Composite Index rose 0.1 per cent to 2,705.69.
“Nothing has really been done to stimulate growth in Europe,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati. “Without growth, you can’t fix this issue. If Germany slows down, then, you start to have a real problem on how to make that happen. There’s more risk on the earnings side as to how companies are going to come through all this.” (Additional reporting - Bloomberg)
