Investors wiped more than an estimated €5 billion off the value of three leading Irish companies as news of Covid’s latest variant sparked stock market panic.
Stocks tumbled around the world on Friday after countries moved to impose new travel curbs to halt the spread of a new South African Covid strain feared to be more easily spread than current variants.
The Irish Stock Exchange’s Iseq Index, which tracks all shares traded on the Dublin market, retreated 4.48 per cent to close at 7,834.61 on Friday.
Ryanair Holdings lost more than €2 billion of its value as investors sold shares in travel and leisure businesses, seen as most vulnerable if countries reinstate lockdowns or restrictions.
Shares in Europe’s biggest airline slid more than 12 per cent to trade at €14.035 as Dublin closed.
Ryanair’s price had actually recovered to almost €16 on Thursday after losing ground earlier in the week when nervousness over renewed travel curbs first hit markets.
Building materials giant, CRH, another of the Irish market's heavy hitters, saw its value fall by €1.5 billion as a sell off sent its stock falling 4 per cent to €43.70.
Paddy Power owner, Flutter Entertainment, whose global sports betting business could suffer if lockdowns hit these events, had around €1.6 billion wiped off its total worth. Its stock fell 7 per cent in Dublin to €120.15.
In London, shares in Aer Lingus owner, International Airlines Group, retreated 14.6 per cent to 131.76 pence sterling.
Back in Dublin, Dalata Hotel Group, owner of the Clayton and Maldron chains, slid 7.88 per cent to €3.39.
AIB shed 8.64 per cent to close at €1.9185 while Bank of Ireland lost 7.17 per cent to €4.716.
Few stocks escaped the rout. House builders Cairn Homes and Glenveagh Properties lost ground, as did packaging giant Smurfit, office developer Hibernia Reit and landlord Irish Residential Properties.
European and US stock markets
European stock markets fell 3 per cent to 5 per cent. On Wall Street, which closed early for Thanksgiving weekend, the benchmark S&P 500 slid 2.3 per cent while the Nasdaq, home to many tech companies, dropped 2.2 per cent.
Scientists have yet to decide if Covid’s latest strain actually transmits quicker than others or if it can evade vaccines or immunity more easily.
However, stock market observers pointed out that shares have been rising in value for months.
Kiran Ganesh, strategist at UBS Global Wealth Management, agreed that it was too early to judge the South African strain's impact.
“Where the market is selling off so dramatically is a product of, ‘yes, this is bad news,’ but also the fact that we have had a pretty strong run with relatively low volatility for a while,” he explained.
Meanwhile, oil prices suffered one of the largest ever one-day plunges, crashing more than 11 per cent as news of the new virus strain sparked fears that renewed lockdowns will hurt global demand. The crash, the seventh largest ever for Brent crude, the global oil benchmark, may prompt the OPEC+ cartel to re-consider its policy when it meets next week, with the group increasingly leaning toward pausing its output hikes.
