Investor sentiment was weak during trading yesterday, after stocks were knocked by news of escalating violence in Iraq.
In London, equities also retreated in the wake of Bank of England governor Mark Carney’s signal that interest rates may rise sooner than expected.
Crude oil prices and the dollar were driven higher by the conflict in Iraq, which damped the general buying appetite on equity markets even as bullish news from the US tech sector lifted stocks on Wall Street.
A gauge of oil companies climbed the most among the 19 industry groups in the Stoxx Europe 600, as Brent crude oil edged above $113 a barrel.
It has increased more than $4 this week on concerns that an insurgency in Iraq could trigger civil war and crimp oil exports.
DUBLIN
The Iseq dropped 1.4 per cent, as most of the major stocks slid on a nervous day for equities across Europe. Building materials company CRH declined 1.8 per cent to €20.84, while insulation-maker Kingspan retreated 2.8 per cent to €12.94.
As the geopolitical tensions hit airline stocks, Ryanair declined for a third consecutive day, finishing down 2.7 per cent at €7.11, while after its profit warning yesterday Aer Lingus also continued its negative run, closing down 2.2 per cent at €1.41.
Paper and packaging group Smurfit Kappa fell 2.9 per cent to €17.11, while there were also losses for Paddy Power, which closed down 2.6 per cent at €48.38, and C&C, which finished at €4.79, down 1.3 per cent.
LONDON
UK stocks fell the most in two months as George Osborne promised that the Bank of England will get new powers to rein in mortgage lending, while the governor of the Bank of England, Mark Carney, said interest rates may rise sooner than expected.
The FTSE 100 Index lost 65.26 points, or 1 per cent at the close of trading in London, extending the benchmark’s decline this week to 1.2 per cent.
Persimmon, the UK’s largest housebuilder, slumped 7 per cent to 1,211 pence, while Barratt Developments and Bovis Homes lost 6.3 per cent to 346.3 pence and 4.9 per cent to 751 pence, respectively.
Land Securities and British Land , the country’s top two listed property companies, fell more than 4 per cent, while Kingfisher, Europe’s biggest home improvements retailer, declined almost 4 per cent.
EUROPE
Across Europe, Germany’s DAX fell 0.3 per cent, France’s CAC was down 0.2 per cent and the euro zone’s blue-chip Euro Stoxx 50 dropped 0.04 per cent.
National benchmark indexes fell in 14 of the 18 markets in western Europe.
Total, France’s largest oil company, rose 0.9 per cent to €52.86, while in Germany, Lufthansa’s share price price closed down 3.5 per cent at €16.27.
Geberit gained 1.7 per cent to 309.3 Swiss francs after analysts at Goldman Sachs raised its rating on the maker of toilets and bathroom piping to a "buy" recommendation, citing the likelihood of further market-share gains in Europe and emerging markets.
US
The impact of the violence in Iraq on equity values was offset by positive sentiment arising from semiconductor-maker Intel’s raising of its full-year revenue outlook.
The company cited stronger-than-expected demand for personal computers used by businesses. Intel added the most gains to the three major indices on Wall Street, and its shares were up 6.9 per cent at $29.89.
Applied Materials, which manufactures and services semi-conductor wafer fabrication equipment, gained 1.6 per cent to $22.08, poised for the highest close in almost seven years, while Micron Technology, the largest US maker of memory chips, gained 1.3 per cent to $31.26. (Additional reporting: Bloomberg / Reuters.)
