The Irish stock market was closed for the bank holiday, but elsewhere in Europe, equities picked up where they had left off before the weekend – on a downward trajectory. Stocks declined for the second consecutive session, extending a one-month low, amid speculation that the US Federal Reserve will scale back its programme of bond purchases.
The FTSE and other stock markets were also hit by weak manufacturing data from the US and China, which raised doubts over the global economy. Investors responded to the data by booking a profit on this year’s rally, rather than interpreting the data as a sign that the stimulus programmes would continue.
LONDON
The FTSE 100 index slid 0.9 per cent, dropping to a one-month low having reached a near 13-year-high in May.
Chip designer ARM was the worst-performing FTSE 100 stock. It slumped 7 per cent after analysts voiced doubts over whether Cortex A-12, its new processor for smartphones, would do enough to assuage concerns over the firm's competitive position and high stock price valuation – especially on the day that Samsung announced it had done a chip deal with rival Intel.
Tesco, the UK's largest retailer, lost 1.9 per cent to 358.45 pence. J Sainsbury fell 0.8 per cent to 371.5 pence and Marks & Spencer retreated 0.9 per cent to 466.8 pence and Wm Morrison Supermarkets fell 1.3 per cent to 270.3 pence.
Travel companies also declined as crude oil rallied in New York. EasyJet dropped 3.6 per cent to 1,221 pence, International Consolidated Airlines Group slid 1.6 per cent to 275.2 pence and cruise ship operator Carnival fell 3.7 per cent to 2,163 pence.
Lonmin tumbled 4.3 per cent to 282.4 pence after a National Union of Mineworkers member was killed and a second wounded in a shooting near the company's Marikana mine in northwestern South Africa. Polymetal, a Russian gold and silver producer listed in London, gained 1.9 per cent to 703.5 pence.
EUROPE
National benchmark indexes retreated in 15 of the 17 western-European markets open, with France's CAC 40 dropping 0.7 per cent and Germany's DAX losing 0.8 per cent.
Roche, the world's largest maker of cancer drugs, slid 3.7 per cent to 230.30 Swiss francs in its biggest decline since November 2011. Roche's Avastin drug failed to extend the survival of patients with deadly brain tumours, a study found.
Munich Re, the world's biggest reinsurer, lost 2.7 per cent to €140.80 and Hannover Re, the fourth-largest, dropped 3.3 per cent to €56.39, as Prague braced for the swollen Vltava River to crest and the German cities of Passau and Rosenheim declared a state of emergency.
Ingenico, a French provider of payment terminals and services, decreased 3.4 per cent to €50.92 for its biggest drop in three months. Berenberg Bank downgraded the stock to sell from hold, citing an increase in competition.
NEW YORK
Most US stocks fell in early trading, leaving the S&P's 500 Index at its lowest in nearly three weeks, after manufacturing unexpectedly contracted in May, indicating industry will provide little support for the economy.
Bank of America dropped 2.3 per cent to $13.34 and JPMorgan slid 1.6 per cent to $53.70 for the biggest drops in the Dow. Bank of America's $8.5 billion settlement with mortgage-bond investors is set to be considered by a New York court two years after it struck the deal to resolve claims over home loans bundled into securities. Merck rose 4.6 per cent to $48.86 for the biggest gain in the Dow, and Bristol-Myers Squibb added 6 per cent to $48.75. The new experimental immune-boosting drugs from the companies are producing such promising early results that doctors at the American Society of Clinical Oncology meeting in Chicago are openly speculating that some patients with the deadliest form of skin cancer may be cured. (Additional reporting Bloomberg/Reuters)
