European shares hit five-month low as tech, miners weigh

European shares dropped to their lowest level in five months on Thursday as worries over trade weighed and tech stocks came under pressure.

In a volatile session which saw the Stoxx 600 seesaw in and out of positive territory, the pan-European benchmark ended 0.6 per cent lower.

DUBLIN

The Iseq followed other European bourses lower, but managed to close flat at 6693.58.

Housebuilder Cairn Homes, which updated investors earlier in the week, closed up 5.8 per cent, making it the biggest gainer of the day. Drinks group C&C also ended the day positively, up 2.74 per cent to €3.56.

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Other risers included Total Produce and Smurfit Kappa, both up nearly 1 per cent.

In the banking sector, Bank of Ireland was up 1 per cent to €7.22 while AIB was down 1.7 per cent at €4.70. Permanent TSB was also lower, down 1.9 per cent to €2.06.

Troubled Irish-Swiss food company Arytza lost 4 per cent to end the day at €7.86.

LONDON

British shares fell as investors assessed turmoil on emerging markets and waited to see whether the US would take its trade dispute with China to a new level and impose tariffs on a further $200 billion (€172 billion) of imports.

The FTSE 100 ended the session 0.9 per cent down at 7391.65 points, a roughly five-month low that represents a decline of about 4.8 per cent since the start of the year.

A negative opening on Wall Street, with a fall of internet stocks on the Nasdaq, served to darken the mood.

BHP Billiton and Admiral Group lost 4.5 per cent and 1.8 per cent respectively. Centrica, meanwhile, posted the best performance with a 5 per cent gain. The energy supplier's jump in value came as Britain's regulator proposed a price cap on default energy bills to save households about £1 billion a year.

Turnaround specialist Melrose Industries chalked up a 3.7 per cent gain in its share price after saying it has made significant progress in reorganising engineering group GKN since its hostile £8 billion (€8.9 billion) takeover.

Shares in Dixons Carphone, the troubled electricals and mobile phone retailer, were up 1.5 per cent after it said it was on track to hit full-year profit targets.

EUROPE

Utilities were the strongest gainers in Europe on Thursday with Italy’s state-controlled Enel rising 2.1 per cent after Goldman Sachs upgraded the stock to buy. Analysts at the US bank said Enel has the capacity to buy back €10 billion worth of shares over the coming years.

The top individual gainer on the Stoxx though was aerospace supplier Safran. It gained 6.4 per cent, supporting other aerospace stocks including plane maker Airbus, which rose 1.2 per cent.

Weir Group was the biggest faller, down 8.6 per cent after the maker of pipes for the energy and mining industries said there were initial signs of pricing pressure and flagged a softening in demand.

Luxury goods maker Burberry was down 1 per cent after it said it would no longer burn unsold goods.

WALL STREET

The tech-heavy Nasdaq saw sharp declines as internet stocks faltered for a second day on concerns about increased regulation, while warnings from Micron Technology and KLA Tencor led a slide in chip stocks.

Chipmaker Micron sank 9 per cent after chief financial officer David Zinsner said prices of NAND chips declined in the third quarter and at least two brokerages said the markets for NAND and DRAM chips were worsening. KLA Tencor tumbled 9 per cent, and weighed on other chip equipment makers, after chief financial officer Bren Higgins said September was still "a drought for DRAM" and that a pick-up in business later this year would be less than expected.

Facebook fell 2.7 per cent, Twitter dropped 2.1 per cent, Alphabet slipped 1.8 per cent and Snap was down 2.3 per cent, hitting a fresh record low. The losses, along with those in chip companies sent the S&P 500 technology index down 1.32 per cent, the most among the major 11 S&P sectors. – Additional reporting Reuters