Stocks fall on US budget concerns

Ryanair announces a new acceptance agreement with American Express

The Iseq closed unchanged yesterday at 4,273.23, following a pattern set across Western markets. Traders and analysts put most of the blame for the slow day on the inability of politicians in Washington DC to deal with a potential budget crisis as well as some new economic data from the US that made investors pause.

Ryanair announced a new acceptance agreement with American Express, which it said would provide passengers, business travellers and corporate travel departments with more ways to book flights. The Ryanair share closed the day at €6.49, a rise of 1.03 per cent. Its fellow airline on the exchange, Aer Lingus, closed at €1.5, a fall of 0.53 per cent.

C&C rose 0.6 per cent, to €4.17, while heavyweight stock CRH fell by 0.06 per cent, to €17.77.

There was little by way of market news. Origin Enterprises, which is quoted on the enterprise securities market, said its revenues increased by 5.8 per cent to €1.4 billion in the year to the end of July. The agri-services group said profit before tax for the year increased by 11.7 per cent to €84 million. The company's dividend for the year rose by 15 per cent to 17.25 cent from 15 cent last year.

Britain's top shares fell, led by the world's largest cruise operator Carnival after a profit warning triggered downgrades, while energy suppliers Centrica and SSE fell after the opposition Labour Party talked of an energy price freeze.

Carnival slid 6.7 per cent to 2,098.26 pence, making it the FTSE 100's top faller for the second session in a row, after Tuesday's warning of a possible loss prompted Morgan Stanley to downgrade the company to "underweight".


The stock has suffered its biggest two-day drop since mid-January 2012, down some 12 per cent.

A JPMorgan downgrade knocked Tesco, off 3.5 per cent, to 360.9 pence, the lowest price in two months, with the bank moving its rating on the grocer to "underweight", believing the UK food retailing industry to have structural problems and that "Tesco will be most impacted".

Other top fallers included Centrica and SSE, which were left nursing respective declines of 5.3 per cent and 5.8 per cent after opposition leader Ed Miliband said he would cap energy prices if elected in 2015.

The FTSE 100 closed down 19.93 points, or 0.3 per cent, at 6,551.53 points, with concern about the outlook for US monetary and fiscal policy keeping investors on edge.

Most European stocks fell amid concern over budget talks in the world's largest economy and as a report showed US durable-goods orders excluding transportation unexpectedly dropped.

Nordea Bank slid 2.6 per cent to 77.15 kronor, the biggest decline in four weeks, as Sweden sold its remaining stake in the Nordic region's largest lender. Sweden sold 284 million shares for 76 kronor each, valuing the 7 per cent stake at 21.6 billion kronor ($3.4 billion).

ThyssenKrupp rallied 3.7 per cent to €18.16 as Cevian Capital AB boosted its holding in the German steelmaker. The Swedish investment company said it's convinced of the steelmaker's long-term potential.

Commerzbank AG dropped 6 per cent to €8.78, extending its two-day decline to 7.9 per cent.

US stocks dipped in choppy trading, with the S&P 500 eyeing a fifth day of losses, as a lack of progress in budget negotiations in Washington puzzled investors.

Concerns over a potential US government shutdown added to mixed signals on the immediate future of the monetary policy that has given support to equities, keeping traders on edge. Facebook shares rose 1.5 per cent to $49.18, brushing against $50 after a slew of brokerage upgrades. – (Additional reporting Bloomberg/Reuters)