European shares broke a four-day winning run today after China surprised financial markets by raising banks' reserve requirements, and continuing concerns about the financial state of Greece continued to weigh on market.
Economic data which showed that economic recovery has stalled in the euro zone also weighed on sentiment.
The FTSEurofirst 300 index of leading European shares provisionally closed 0.3 per cent lower at 987.98 points. Financials were the worst-hit. Barclays, BNP Paribas, HSBC, Societe Generale, Lloyds Banking Group and Credit Agricole were down 1.1 to 3.3 per cent.
The UK's FTSE 100 dropped 0.4 per cent andd France's CAC 40 fell 0.5 per cent. Germany's DAX slipped less than 0.1 per cent.
In Dublin, macro rather than micro economic issues dictated the trajectory of the market, as global markets responded to a constant stream of economic data during the session from China, Europe and the US and continuing concern about the financial state of Greece weighed on investors. The ISEQ managed to slightly outperform its European peers, finishing marginally higher.
Volumes in financials were below average, with little action in the stock. According to one trader, the banking stocks were “marking time” as nervousness about globalfinancial issues weighs on investors.
AIB and Bank of Ireland both lost value on the day, shedding 2.3 per cent and 1.3 per cent respectively. Their performance was in line with financials across Europe which were among the worst-performing sectors yesterday.
Irish Life & Permanent underperformed, losing a little under 7 per cent on the day, although analysts noted this was due to no particular reason, and may have been down to one aggressive seller. Volumes were also well-below average.
Food and beverage stocks were among the best performers. There was some aggressive buying in C & C stock which rose by 3.7 per cent to close at €2.76 on strong volumes. Kerry Group gained 3 per cent to €22.00.
Paddy Power added 55 cent to its share price, a gain of 2.3 per cent, on the back of news that it is to increase its stake in its Australian business, Sportsbet.
CRH managed to recover its losses in the previous session, picking up in the second half of the day to gain just over a half a percent. Its closing price was €16.75.
Overall there was little activity in construction-related stocks, with one analyst noting that concerns about the ability of states to fund infrastructural projects weighed on investor sentiment. Nonetheless Kingspan managed to add just under 1 per cent to close at €5.65, though Grafton was off a little under 1 per cent on the day at €2.46.
US stocks fell today on the back of China's surprise decision to restrict bank lending. Markets were also pressured by weaker-than-expected reads on US consumer sentiment and business inventories, and brushed aside a higher-than-forecast figure on January US retail sales, which rose 0.5 per cent.
At 5.45pm (Irish time) the Dow Jones was down 48 at 10,096 while the Nasdaq was slightly up at 2,179.
Additional Reporting: Reuters
