Irish and European markets fell on Monday as a slide in Chinese equities fuelled investors’ fears that a slowdown in the world’s biggest market will hamper the global recovery.
The Caixin/Markit Purchasing Managers’ Index showed Chinese manufacturing slid in December. The country’s stock markets fell 7 per cent on the news, triggering the authorities to halt trading under new “circuit-breaker” rules designed to curb volatility.
Similarly disappointing news from the US, where the Institute for Supply Management’s Index reported a fall to 48.2 – any number below the benchmark 50 indicates a decline – added to investors’ nervousness.
DUBLIN
Irish stocks mirrored those in
Europe
, but was not as badly hit, with the Iseq falling less sharply than leading indices.
Index heavyweight, building materials giant CRH, which has almost equal exposure on both sides of the Atlantic, slid 2.68 per cent to close at €25.985, putting it more or less in line with the general fall in European markets. About 600,000 of its shares changed hands in Dublin on Monday.
Packaging group Smurfit Kappa, which announced two acquisitions in Brazil, ended the day 0.77 per cent down at €23.36. The stock lost almost 3 per cent early in the morning, but regained much of that ground later on in the day.
Traders said a large buyer helped insulation specialist Kingspan to outperform the market. Its shares added 2.43 per cent to €24.90, making it one of the day's best performers.
Bookmaker Paddy Power, which is hoping to complete a merger with Betfair, gained 0.2 per cent to €123.35. The total value of the shares traded in the company was €13 million.
LONDON
The mining index was the hardest hit, falling 3.7 per cent on Monday, its biggest one-day percentage drop since mid-December. Shares in
Anglo American
,
Glencore
,
Antofagasta
,
BHP Billiton
and
Rio Tinto
dropped 3.9 to 7.2 per cent.
Oil firms were also lower in the wake of Saudi Arabia cutting diplomatic ties with Iran, two of the world's biggest oil producers. BP fell 6.5 pence sterling to 347.6p, while Royal Dutch Shell was 5p lower at 1538p.
Pharmaceutical giant Shire was down more than 5 per cent to 4453p, amid speculation the Irish-based company is close to completing a takeover of US rival Baxalta.
Among mid-cap companies, shares in Cairn Energy rose 1.7 per cent after the oil explorer reported positive results from a well off the coast of Senegal.
EUROPE
The pan-European FTSEurofirst 300 index lost 2.5 per cent, its biggest one-day drop since a 3.3 per cent fall on December 3rd, while the euro zone’s Euro Stoxx 50 index fell 3.1 per cent and Germany’s Dax slumped 4.3 per cent.
All sectors were in negative territory with auto stocks, for whom China is a key overseas market, leading the way with a fall of 4.5 per cent.
Daimler lost 5.3 per cent after its chief financial officer told Boerse-Online it would not spin off its commercial vehicles unit.
Continental declined 4.3 per cent after a report that its chief executive said it may lose sales because of last year's emissions scandal at its customer Volkswagen.
Air France KLM shares rose 3.3 per cent after Bank of America Merrill Lynch upgraded its rating on the stock to "buy".
NEW YORK
US shares tanked on the back of the bad news.
JPMorgan
was down 3.5 per cent at $63.28, while
Apple
fell 2 per cent to $103.09.
Amazon
weighed the most on the S&P and Nasdaq, falling 5.9 per cent to $636.08.
Gold jumped 2 per cent, while benchmark US Treasury yields hit two-week lows as investors fled to safe-haven investments. Netflix was down 6.6 per cent at $106.88 after Baird cut its rating on the stock to "neutral". – (Additional reporting: Bloomberg, Reuters)
