European stocks fell for a fifth day as a gauge of lenders declined to its lowest level this year and equities in peripheral nations tumbled. Investors across Europe trimmed their exposure to banks in response to concerns about the health of Portugal’s biggest listed bank.
Portugal's PSI share index fell 4.1 per cent to a nine-month low, lagging all other European benchmarks after shares and bonds of Espirito Santo Financial Group, the chief shareholder in Banco Espirito Santo, were suspended over "material difficulties" at its parent firm ESI. Trading in Banco Espirito Santo was also later halted after a 19 per cent drop.
In Dublin, the Iseq index closed 0.76 per cent or 35.61 points lower at 4,646.66.
DUBLIN: It was a nerve-wracking day in Dublin as investors monitored developments in Portugal. The Iseq remained in negative territory for most of the day and despite a late rally was unable to turn the tide.
Bank of Ireland was one of the main casualties with its share price falling to 23 cent before rising at the close to finish down 1.2 per cent at 24 cent.
Building materials group CRH was also weaker. It closed down 1.3 per cent at €18.78 after US peer Wolseley reported a slowdown in residential spending.
Smurfit Kappa outperformed many of its peers such as DS Smith which was down by nearly 4 per cent in trading, Smurfit Kappa meanwhile fell 0.09 per cent to €14.98.
Drinks group C&C, which last week issued a positive interim statement, has struggled to gain momentum all week. Yesterday was no different with the stock closing down 1.3 per cent at €4.26.
LONDON: The FTSE 100 Index posted its worst four-day slump since January, as London Stock Exchange Group (LSE) slid and banks extended losses.
LSE slipped 3.1 per cent to 1,896 pence after Qatar Holding cut its stake in the exchange operator to 10.3 per cent from more than 15 per cent in May. Qatar sold the shares at 1,915 pence each, according to LSE.
Banks were all lower with Barclays, Britain's second-largest bank, slipping 1.7 per cent to 208 pence. HSBC Holdings, Europe's largest lender, dropped 1.3 per cent to 589p.
Airlines were also badly affected with IAG, parent of British Airways, losing 2.4 per cent to 331.7 pence, and EasyJet fell 1.2 per cent to 1,272 pence.
Burberry rose 3.2 per cent to 1,464 pence after the luxury retailer said retail revenue rose 9 per cent to £370 million in the three months through June.
EUROPE: Banks in Portugal, Italy and Spain all sank as investors sought to sell on their shares as concerns over Portugal's Banco Espirito Santo rose.
Italy's Banca Popolare di Sondrio Scarl lost 1.6 per cent to €3.43. Banca Monte dei Paschi di Siena fell 4.3 per cent to €1.34 and Banco Popular Espanol lost 2 per cent to €4.61.
Fugro sank 19 per cent to €32.83 after the deepwater-oilfield surveyor said it expects a write-off of €300 million to €350 million. First-half margin on earnings before interest and taxes will be in the low single digits, compared with an 11.4 per cent margin a year earlier, said the Dutch company, citing project delays because of slower capital spending and a weakening oil and gas market.
US: Stocks pulled well off session lows but were still falling as concerns about Portugal's top listed bank gave investors a reason to cash in recent gains.
Investors in Lumber Liquidators thought they were paying too much, with shares plunging 21.7 per cent to $55.17 after the hardwood flooring retailer cut its earnings outlook.
Sandwich chain Potbelly estimated second-quarter revenue and profit below analysts' expectations and its stock plummeted 22.9 per cent to $11.29.
Shares of Crumbs Bake Shop rose 1,200 per cent after reports that the struggling chain of cupcake shops will be acquired. Crumbs rose to 40 cents. – (Additional reporting: Reuters/Bloomberg)
