Eurostoxx 50: 2,202.72 (-1.00%) Frankfurt DAX: 5,701.78 (-0.50%) Paris CAC: 2,972.30 (-0.88%)THERE WAS little Friday exuberance on stock markets yesterday as European equities went into retreat after credit rating agency Standard & Poor's said the region's economies may see a larger than previously forecast contraction in 2012.
In anticipation of a downgrade of France’s triple-A credit rating, French officials lashed out at the UK, with French finance minister Francois Baroin claiming it was “better to be French than British, economically speaking”.
After close of trade, ratings agency Fitch placed Ireland, Belgium, Spain, Slovenia, Italy and Cyprus on a “negative” ratings watch.
DUBLIN
The big news in Dublin was actually all about London, as cement-maker CRH, the largest stock to trade on the Iseq, joined the benchmark FTSE 100 index.
There were huge volumes in the London auction, with 37 million shares trading at the close.
The stock finished at €11.55, up 28 cent, and bucking the prevailing direction of trade.
On the Dublin market, CRH closed reasonably flat at a price of €13.39.
Meanwhile, exploration group Dragon Oil released a drilling update that reiterated its production targets in its offshore Turkmenistan asset at 70,000 barrels of oil per day.
It fell 0.6 per cent in Dublin to €5.54.
Food groups Greencore and Kerry both climbed, with the former up 2.1 per cent to 63 cent and the latter rising 1.9 per cent to a closing price of €28.25.
Overall, the Iseq index finished up three-quarters of a per cent, though investor sentiment waned in the afternoon as markets across Europe trended lower.
LONDON
The FTSE 100 declined 0.3 per cent, with the blue-chip index giving up gains as the session progressed.
Among the fallers, Man Group plc, the world’s largest hedge fund, dropped 4.4 per cent to 127.6 pence after Deutsche Bank recommended selling the stock.
Kazakhmys plc and Antofagasta plc led mining shares higher, both jumping more than 3 per cent.
Kazakhmys added 3.2 per cent to 874 pence as copper and other base metals rose on the London Metal Exchange, while Antofagasta jumped 3.7 per cent to 1,172 pence. Mining group Xstrata plc gained 2.3 per cent to 970 pence, while Essar Energy plc slumped 4.5 per cent to 184.9 pence, its lowest price since its listing in May 2010.
Rio Tinto Group plc, the world’s second-biggest mining company, climbed 1 per cent to 3,060 pence.
EUROPE
National benchmark indexes fell in 13 of the 18 western European markets.
France’s CAC 40 lost 0.9 per cent, Germany’s DAX dropped 0.5 per cent.
Stocks erased earlier gains after S&P said the Netherlands, Germany, Belgium, Austria and Finland may see their gross domestic products suffering larger contraction next year.
The austerity measures adopted across the euro region will imply that there won’t be any fiscal support for growth, it said.
PSA Peugeot Citroen and Fiat SpA led a gauge of carmakers lower. Peugeot dropped 1.7 per cent to €11.81, while Fiat declined 2.6 per cent to €3.43.
After European car sales suffered their biggest decline in five months, Michelin and Cie, the world’s second-largest tyre maker, lost 2.9 per cent to €42.94 and Faurecia SA, Europe’s biggest maker of car interiors, retreated 4.4 per cent to €12.88.
Klepierre SA, Europe’s second-largest shopping-centre owner, increased 6 per cent to €20.65 after chief executive Laurent Morel said he expects a “good Christmas” for his company, and this may make up for a second half of 2011 that hasn’t been as strong as the first half.
US
US stocks erased gains, wiping out a 99-point increase in the Dow Jones Industrial Average, while treasuries extended their advance and the dollar erased losses against the euro as optimism about the European crisis fizzled.
The negative sentiment about the fate of the euro zone outweighed the positive impact of inflation figures from the US, which showed that the cost of living stagnated in November.
The Standard & Poor’s 500 Index climbed by almost half a per cent to end the day of trading at 1,219.66.
The measure has dropped 3.2 per cent this week.
Bank of America and JPMorgan Chase each added 1.1 per cent, leading a rally in financial shares. Blackberry-maker Research In Motion dropped 10 per cent.
Zynga, the largest maker of games for Facebook, declined in its first day of trading after raising $1 billion in an initial public offering.
The shares, listed on the Nasdaq Stock Market, fell 4.2 per cent to $9.58 by lunchtime on Wall Street. – (Additional reporting, Bloomberg)
