Financial stocks led the Iseq lower on Monday as the wider European market baulked at immigration curbs introduced by US president Donald Trump, which stoked concerns about the new administration’s policies on trade and the economy.
The Iseq fell 0.7 per cent to 6,486.15 in early trading, while the FTSE 100 lost 0.8 per cent in London and the pan-European Stoxx 600 dropped 0.9 per cent.
Financial stocks, which had been among the main beneficiaries since Mr Trump’s election in November, amid hopes that his policies would boost growth, inflation and interest rates, were among the main fallers on Monday. Bank of Ireland slid 2.3 per cent, while FBD lost almost 2 per cent.
President Trump on Friday put in place a 120-day hold on allowing refugees into the US, an indefinite ban on refugees from Syria and a 90-day bar on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. His executive order led to huge protests in many US cities and a raft of legal challenges amid confusion over its implementation. The order has also raised worries about the potentially destabilising impact of Mr Trump’s policies.
“Mr Trump always stated these were policies he would implement,” said James Woods, global investment analyst at Rivkin Securities in Sydney. “Quite a lot of it was brushed off as campaign rhetoric, but he is following through. This renews concerns about a trade war with China that would significantly affect both the Asian and the global economy. The biggest threat to markets at the moment is if Trump continues down the path of protectionism without focusing on economic policies.”
Pointing to a weaker opening on Wall Street, S&P, Nasdaq and Dow Jones futures all pulled back about 0.2 per cent. Mr Trump’s immigration orders have created legal uncertainty domestically and drawn criticism from abroad.
Several countries, including long-standing American allies, criticised the US president’s directive as discriminatory and divisive. US judges in at least five states blocked federal authorities from enforcing Mr Trump’s executive order, but lawyers representing people affected said some authorities were unwilling on Sunday to follow these judges’ rulings.
Separately, a shooting in Canada on Sunday added to wider geopolitical concerns. Six people were killed when a gunman opened fire at a Quebec City mosque during evening prayers, in what Canadian prime minister Justin Trudeau called a “terrorist attack on Muslims”.
Over on the bond markets, the yield, or market interest rate, on Irish 10-year bonds rose to 1.299 per cent from 1.149 per cent on Friday, their highest level since November 2015. Signs of an accelerating inflation in Germany has served to push yields higher across euro-zone government bonds.
Consumer prices rose 2.3 per cent year-on-year in Saxony this month. National data due this afternoon is expected to show that German inflation rose to hit the European Central Bank’s 2 per cent target.
Elsewhere, the euro was flat at about $1.0690, while crude oil prices fell.
