European shares decline as financial and energy stocks slip back

European shares slipped on Tuesday as investors assessed the impact of the pandemic, awaited the first US presidential debate and were discouraged by the chances of progress for a fiscal stimulus package in Washington.

Bank shares led the decline. Oil prices also tumbled amid renewed concern about a lack of demand, sending energy stocks into the red.

DUBLIN

The Iseq fell back 0.6 per cent, with the Dublin market moving in line with the negative mood across Europe. Bank of Ireland fell 5.9 per cent to €1.59, while AIB ended almost 5 per cent lower, at 88 cent, as financial stocks came under pressure.

Building materials group CRH, which would likely benefit if a US stimulus package was agreed, dropped 1.2 per cent to €31.27, while Ryanair declined 1.9 per cent to €11.27. Another stock exposed to Covid-19 travel restrictions, Dalata Hotel Group, ended 1.6 per cent lower at €2.42.

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Smurfit Kappa was one of the significant risers, with the packaging group added 3.2 per cent to €33.84. Insulation-maker Kingspan also advanced, finishing 1.4 per cent higher at €77.35, while Ires Reit added 2.8 per cent to just under €1.38.

But food groups struggled with Glanbia falling 2.2 per cent to €8.66 and Kerry edging 0.4 per cent lower to €108.40.

LONDON

The FTSE 100 fell 0.5 per cent on worries about a stalling economic recovery and surging Covid-19 cases, with pub owners sliding on the prospect of further curbs as another round of Brexit negotiations began. The mid-cap index slipped 1.1 per cent and was on track to record its worst month since March.

Banks and oil stocks were among the biggest decliners, while defensive play such as utilities and industrials rose.

Among bright spots, plumbing parts distributor Ferguson rose 6 per cent after it restored its dividend as cost-reduction measures helped it report a 4.1 per cent rise in annual profit.

Greggs lost 8 per cent after the bakery chain said it expects trading to remain below normal for the foreseeable future due to the pandemic.

Pub owners JD Wetherspoon, Marston's, Mitchells & Butlers and Restaurant Group all slumped more than 5 per cent after a junior minister said Britain's nightclubs may have to stay shut until a Covid-19 vaccine is developed.

EUROPE

The benchmark European Stoxx 600 index also fell 0.5 per cent as investors remained wary of the outlook for the pandemic-stricken global economy.

In Germany, the Dax nudged down 0.35 per cent, while the French Cac-40 finished 0.2 per cent lower. Italian stocks fell 0.5 per cent and Spanish equities declined almost 1.2 per cent.

Among individual stocks, sensor specialist AMS jumped 6.6 per cent to the top of Stoxx 600, with traders pointing to supportive news about lighting group Osram, which it recently took over.

Finnish valves maker Neles gained 2.2 per cent after Valmet approached the company with a merger proposal, challenging a $2 billion bid that Neles' board recommended from Swedish engineering group Alfa Laval. Valmet shares dropped 4.9 per cent.

NEW YORK

The end-of-month rebound in global equities evaporated as investors were sceptical about prospects for fiscal stimulus and the outlook for the coronavirus pandemic.

The S&P 500 index slumped, led by losses in energy and financial companies, after data showed New York City’s rate of positive tests rose above 3 per cent for the first time in months and as stimulus talks ended without an agreement.

The tech-heavy Nasdaq 100 outperformed, but was still in the red, as Apple, Microsoft and Amazon all slid.

With the pandemic’s global death toll now exceeding one million and virus cases on the upswing in many areas, investors are pinning hopes on a $2.2 trillion stimulus proposal by Democrats to help support economic growth. Markets were also girding for the first presidential debate, which will take place overnight. – Additional reporting: Bloomberg / Reuters.