European stocks continue recovery

A sell-off in mining and energy stocks weighed on markets across the globe on Tuesday, against a background of continuing uncertainty in China. Markets across Europe slipped back, but the Iseq managed to outperform.

DUBLIN

The Iseq outperformed its European peers, closing up by 0.8 per cent, or 53.36 points, at 6,591.16 .

Property stocks had a good day, buoyed by the strength of recent economic data as well as a rent report which showed rents up 8.5 per cent over the past 12 months in the capital.

Hibernia Reit advanced by 2 cent, or 1.7 per cent, to finish up at €1.37, while Green Reit was up by 1 cent, or 0.9 per cent, to €1.57. Ires Reit up was up by 0.2 per cent to €1.12.

Brokers pointed to "good volume" in hotel stock Dalata, which was up by 7 cent, or 1.7 per cent, at €4.17.

Ryanair was strong again, adding 17 cent, or 1.4 per cent, to close at €12.88.

Following shareholder approval for the acquisition of Aer Lingus by IAG, the stock will shortly delist. Brokers noted that activity in the stock had dried up ahead of this move. The stock closed down by 0.3 per cent at €2.475 yesterday.

PTSB was also in the black, adding 9 cent, or 1.8 per cent, to finish up at €5.00.

LONDON

Britain’s index of leading shares slipped yesterday, hit by a pick-up in inflation and a decline in energy and mining stocks as oil and metals prices fell.

Commodity stocks weighed on UK stocks, dragging the FTSE 100 lower. The FTSE 100 lost 0.4 per cent at the close in London. The gauge slid 2.5 per cent last week as commodity producers extended losses.

Data showing British inflation edged up in July pushed sterling to its strongest in 7½ years against a trade-weighted basket of currencies. The FTSE was affected because a strong pound can hurt exporters.

One exception to the commodities decline was Glencore, which rallied 3.6 per cent even as industry peers fell, after investor Harris Associates increased its holding.

Shire snapped a five-day losing streak to add 1.7 per cent. Antofagasta led declines, with Anglo American, Persimmon, BHP Billiton and Rio Tinto also falling.

EUROPE

European stocks extended a rebound after the worst weekly drop in more than a month, amid signs the US economy is strengthening.

The Stoxx Europe 600 Index added 0.3 per cent to 388.34, rising higher after data showed US new-home construction climbed to an almost eight-year high in July.

The pan-European FTSEurofirst index of 300 leading shares managed a gain of 0.3 per cent, having been in negative territory much of the morning. Germany’s Dax and France’s CAC 40 fell nearly 0.2 per cent.

Healthcare shares contributed the most to equity gains, with Novo Nordisk and Shire up 1.6 per cent or more. Since China's currency devaluation last week, investors wary of its effect on demand for goods have sent the Stoxx Europe 600 Index down 2.9 per cent.

BHP Billiton and Anglo American dragged miners to the worst decline among 19 groups, while oil shares also dropped.

NEW YORK

US stocks fluctuated as investors weighed improvements in America’s housing market against the prospects for slower growth in China and other emerging nations amid a deepening sell-off in commodities.

Oil and copper led a slide in commodities on speculation the global fuel glut will persist and China’s economy will face further headwinds.

The S&P 500 continues to trade in the tightest range in nine decades and is hovering above its average price for the past 100 days.

The index is about 1.4 per cent below its all-time high reached May 21st. – (Additional reporting Bloomberg/Reuters)