STOCKS FELL across Europe yesterday as investors sought safe havens from the debt crisis in French and Austrian bonds.
Securities issued by governments such as France, Austria and the Netherlands rose, cutting their yields to all-time lows. Investors are now close to paying Germany to look after their money.
However, Irish Government bonds went in the other direction. By 3.10pm, two-year notes had slipped 17 basis points, pushing the yield out to 6.98 per cent. The interest rate itself stood at 7.37 per cent.
Bad news on the US jobs front compounded investors’ fears yesterday afternoon. Washington’s Labour Department issued figures showing that first-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26th, indicating a slowdown in the world’s biggest economy.
DUBLIN
TRADERS IN Dublin reported that volumes were generally low while “end of the month balancing” resulted in a number of stocks being sold.
Ryanair fell sharply in the afternoon, shedding 2.97 per cent to close at €4.05.
The market’s biggest stock, international building materials giant CRH, which accounts for around one-third of the Iseq index, fell 3.38 per cent to end the day at €13.60. In a related sector there were more buyers around for insulation systems specialist Kingspan, which fell 1.02 per cent to €6.885.
There was buying interest in food and ingredients group Kerry, which ended the day ahead at €34.905.
Titanium mine Kenmare Resources made ground for the second day running, adding 1.25 per cent to close at 56.7 cent.
Listed bookie Paddy Power was one of the biggest gainers yesterday, adding 1.96 per cent to close at €52.
LONDON
MERGER ACTIVITY boosted London’s FTSE 100 and all-share indeces, cutting investors’ monthly losses.
The benchmark FTSE 100 advanced 0.2 per cent to 5,306.95 at the close in London, trimming its monthly drop to 7.5 per cent.
InterContintental jumped 6.1 per cent to 1,526p after the world’s largest provider of hotel rooms said Trian Fund Management LP owns 4.27 per cent of the company’s shares. Trian pushes companies to adopt strategies that increase their share prices.
Sage Group, the UK’s largest software maker, rose 2.4 per cent to 256.5p.
Berkeley Group Holdings led housebuilders higher, jumping 3.8 per cent to 1,248p as Deutsche Bank raised its recommendation for the shares to buy from hold and a measure of house prices in the UK increased in May.
Taylor Wimpey gained 1.5 per cent to 42.65p, and Barratt Developments rose 1.1 per cent to 119.9p.
Mining companies declined with base metal prices on the London Metal Exchange. Xstrata fell 1.8 per cent to 922.5p, and Kazakhmys lost 2.2 per cent to 665p. Antofagasta dropped 1.5 per cent to 1,002p.
ITV dropped 5.7 per cent to 72.9p after Liberum Capital said television advertising may be weaker in July and August than estimated.
EUROPE
THE STOXX 600 Index declined 0.5 per cent to 239.29 at the close of trade, erasing gains of as much as 0.7 per cent. The measure fell 7 per cent this month as concern mounted that Greece will leave the euro area and Spain’s borrowing costs climbed.
ABB, the biggest supplier of mobile power stations, declined 2.9 per cent to 15.21 Swiss francs. The company said it would probably fail to reach the upper end of revenue targets for its low-voltage subsidiary on lacklustre demand from China and Italy.
Holcim fell 3.6 per cent to 51.60 francs. The Stoxx 600 Construction and Materials Index posted the biggest drop of the 19 industry groups in the Stoxx 600 Index.
Snam, an Italian gas-network operator, climbed 4.2 per cent to €3.27 after Italy’s biggest oil company, Eni, said it would sell a 30 per cent stake to a state-owned bank for €3.5 billion as part of government efforts to increase competition in the energy industry.
US
US STOCKS fell by midday, extending the worst monthly drop for the Standard and Poor’s 500 Index since September, after reports showed economic growth slowed, business activity grew at a slower pace and jobless claims rose.
Facebook shares fell for a fourth straight day amid concern that the world’s largest social-networking service will struggle to wring profit from its 901 million users.
Options traders are paying the most ever to protect against losses in Exxon Mobil, spurred by concern expanding US stockpiles and slowing economic growth will drive down the largest energy producer by market value. Exxon retreated 1 per cent to $79, the lowest level since November. – (Additional reporting, Reuter, Bloomberg)
