European shares fall as investors continue to fret about Greece

Dublin market dragged down by more poor performances from Smurfit Kappa and Aryzta

US and European stocks declined as investors fretted about Greece and the timing of a US interest rate hike. The pan-European FTSEurofirst 300 index finished down 0.7 per cent, while the US benchmark S&P 500 index initially fell 0.2 per cent as investors bet on an interest rate hike in September by the US Federal Reserve after a rosy jobs report last week.

US Treasuries yields also fell yesterday, with benchmark yields retreating from seven-month highs as concerns about Greece and its ability to avert default encouraged safe-haven demand for low-risk government debt.


Dublin’s main Iseq index ended the day 0.3 per cent down at 6,081 in what was described as a muted day’s trading.

Container manufacturing Smurfit Kappa led the slide, closing nearly 2 per cent down at €25.60. The stock has been on a downward trajectory since rumours of a possible takeover abated and reports of a industry-wide supply glut prompted concern over prices.


Another poor performer was Swiss-Irish group Aryzta, which also fell 2 per cent to €47.91 amid ongoing concerns about the performance of its North American business and its expansion into frozen food.

Financial stocks Bank of Ireland and Permanent TSB remained steady at €0.34 and €4.36 respectively.

Aer Lingus inched up 0.6 per cent to €2.44 as markets digested the news that Etihad planned to sell its near 5 per cent stake in the airline.

Elsewhere, insulation manufacturer Kingspan traded down 1.3 per cent at €20.06, while Dragon Oil rose marginally to end the day at €9.21, in line with industry rivals.


Shares in Guinness owner


surged on takeover talk as the wider London market slipped again amid continued anxiety over Greece.

The group, whose cabinet of products also includes Johnnie Walker whisky and Smirnoff vodka, was reported to be in the sights of Brazilian investment firm 3G Capital, helping shares rise nearly 7 per cent.

But the FTSE 100 index was down 14.6 points to 6,790. The fall comes on top of a drop of nearly 200 points last week, its worst week since December.

Meanwhile, supermarkets were under pressure after the latest round of price cuts announced by Morrisons, with savings promised on 200 "everyday items". Shares fell 0.8p to 172.8p. Tesco fell too, off 2.3p to 203.5p, while Sainsbury edged up 0.1p to 247.3p.


Shares in Germany’s largest lender,

Deutsche Bank

, surged almost 4 per cent yesterday on the appointment of a new chief executive, but this failed to offset a sell-off in European equities as bond yields and the euro rose. Deutsche was one of only two stocks in positive territory on the Frankfurt Dax index, which fell 1.2 per cent to its lowest closing level since February.

Syngenta's shares fell 1.6 per cent after it rejected a second takeover proposal from agrochemicals firm Monsanto.

The FTSEurofirst remains up by around 13 per cent since the start of 2015, although it is down 7 per cent from peaks reached in April, partly due to lingering worries over Greece.


US stocks declined to a one-month low as technology shares tumbled, while Treasuries rose and the dollar fell.

The S&P 500 index lost 0.6 per cent early on in New York, falling below its average price for the past 100 days. The Nasdaq 100 index slid 1.1 per cent as eBay lost 3.7 per cent after its PayPal unit trimmed its 2015 free-cash-flow view.

McDonald's rose 0.5 per cent to $96.05 in pre-market trading after the company posted a smaller-than-expected decline in worldwide sales at established restaurants in May.

American Airlines fell 1.2 per cent to $41.21 after its chief executive voiced concern on Sunday about the risk that capacity growth among airlines could depress profits. – Additional reporting by Bloomberg and Reuters

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times