Irish shares stood out as a weak spot across Europe on Friday, falling at their fastest pace in more than three months as a plunge in sterling prompted investors to scramble out of companies heavily exposed to the UK market.
DUBLIN
The Iseq index of Irish shares dropped 2.45 per cent to 5,839.16, the most since July 5th.
Cider and beer maker C&C led the list of declining large-cap Irish stocks, plunging 6.4 per cent to €3.55, as investors mulled how almost about 50 per cent of its profits are denominated in sterling and reported in euro.
Among other Brexit-sensitive Irish stocks, Kingspan dropped 4.5 per cent to €23.49, while Ryanair slid 4 per cent to €11.25, adding to selling pressure on Thursday on the back of a weak update from rival low-cost carrier Easyjet.
Merrion Capital turned cautious on Ryanair's stock on Friday, downgrading its rating to hold from buy.
"Although we continue to view Ryanair as a high-quality company and offering long-term upside, the recent profit downgrade by Easyjet and negative news flow by the other European airlines signals that industry pricing is under significant pressure due to macro factors," Merrion said.
Bank of Ireland, which has about 40 per cent of its loan book in the UK, fell 2.7 per cent to 18.3 cent.
LONDON
The fall in sterling sounded like good news to investors in internationally-focused UK firms, which gain on overseas revenues and competitiveness when the currency falls.
The FTSE 100 index was up 0.6 per cent at 7,044.39 at its close, led by mining companies and Asia-exposed banks Standard Chartered and HSBC.
Miners including BHP Billiton and Anglo American gained at least 2.2 per cent after Bank of America recommended buying the shares, calling the sector "under-owned".
However, UK homebuilders fell after Halifax said house-price growth weakened in September to its slowest pace in three years. Barratt Developments and Bovis Homes declined at least 4.5 per cent.
EUROPE
A third day of declines on Friday sent European stocks to a weekly drop after a US payrolls report did little to diminish prospects for a Federal Reserve rate rise this year.
The Stoxx Europe 600 Index fell 0.9 per cent at the close, as all industry groups except miners declined.
US employers added 156,000 jobs in September, a Labor Department release showed. While that missed the average economist forecast, it followed an increase in August that was more than previously estimated.
Recent strong data have raised trader odds for another Fed hike, adding to worries about a tapering of European Central Bank stimulus.
Among stocks active on corporate news, Dutch insurer Delta Lloyd added 3.4 per cent after rejecting rival NN Group's unsolicited €2.4 billion cash offer for the company.
Deutsche Bank's US-listed shares rose 1.8 per cent after the European market close on reports that Qatar's royal family is considering raising its stake in the lender to as much as 25 per cent.
E.ON rose 3.1 per cent in Germany after a report that Cevian Capital is evaluating buying a 10 per cent stake in the utility.
NEW YORK
US stocks were in negative territory in mid-afternoon trading after weaker-than-expected September jobs report had little effect on the prospects of an interest rate hike by the year end.
The S&P 500 was down 0.29 per cent, and the Nasdaq Composite lost 0.24 per cent.
Honeywell's 7.3 per cent drop weighed on industrials, after the aero parts supplier lowered the upper end of its 2016 sales and profit forecast range.
Chemical company PPG was down 8.3 per cent after forecasting a third-quarter loss.
Tyson Foods plunged nearly 9 per cent after Pivotal Capital downgraded its stock to sell from buy. – Additional reporting: Bloomberg, Reuters
