European stocks fall again as investors fret about US rake hike

European shares ended at their lowest point in two weeks on Monday, adding to losses seen last week as investors fretted over Hillary Clinton's health and a potential interest rate hike by the US Federal Reserve.

The third day of losses came after bonds sold off on expectations the Fed could lift rates next week and the European Central Bank may slow down stimulus measures.

Stocks also slumped after the US Democratic presidential nominee was diagnosed with pneumonia just weeks ahead of the election. Europe’s Stoxx 600 ended down 0.95 per cent with growth-sensitive sectoral indexes like basic resources and banks leading the fallers.

DUBLIN

Dublin's Iseq bucked the trend around Europe, trading down only 44 points at 6,138, largely because of a pick-up in Paddy Power Betfair, which benefitted from a positive broker note, pointing to continued strong earnings from its online operations. The bookmaker's shares ended the day up 1.4 per cent at €106.19.

The other big gainer was Bank of Ireland, which traded up again in contrast to peers elsewhere, to close at 20.4 cents. Traders said the stock had bounced following the exit of big seller in the market last week.

Insulation maker Kingspan had one of the biggest falls, diving 3.2 per cent to €24.20. This was bigger than industry peers but may have reflected profit taking after recent gains.

The other heavyweight to fall was Ryanair, which shed about 2.7 per cent of value to close at €13.08. However, this drop was largely in line with industry rivals across Europe. Providence Resources benefited from rising oil prices to close 10 per cent up at 12 cents.

LONDON

More than £19 billion was wiped off the FTSE 100 Index on Monday as concerns over Hillary Clinton’s health and a potential interest-rate hike by the US Federal Reserve spooked investors. London’s premier index fell sharply to levels not seen since August 3rd, down 1.12 per cent. At one stage, all 100 companies listed on the FTSE 100 were trading in negative territory.

UK stocks were dragged down by Associated British Foods (ABF), which said that like-for-like sales at Primark are expected to fall by 2 per cent over the year as warm pre-Christmas weather and a "very cold" March and April dampened its performance.

ABF added that post-Brexit currency movements would have both positive and negative effects on the group. ABF shares closed lower by 10.8 per cent. Banking shares including Lloyds, RBS and Standard Chartered were among the worst performers on the FTSE 100.

Investec downgraded its outlook for RBS, saying the lender's recovery was "distant and uncertain". Pharmaceutical companies AstraZeneca, Shire and Reckitt Benckiser made gains after Jefferies upgraded its view on AstraZeneca, which is developing a new drug to treat lung cancer.

EUROPE

Across Europe, the German Dax closed 1.34 per cent lower, while the French Cac 40 dropped 1.15 per cent.

German-listed E.ON was the top faller, down 14.8 per cent after it spun off its Uniper division, while Linde dropped 7 per cent after its Praxair merger fell apart.

The rise of quantitative and algorithmic trading, aided by persistently low volatility, has made market pullbacks swifter than they used to be, said JCI portfolio manager Alessandro Balsotti.

Among the few gainers, German lighting group Osram surged 10.1 per cent following a report that Siemens was weighing selling its 17 per cent stake in its former unit.

NEW YORK

Wall Street reversed course to trade higher on Monday as gains in technology stocks more than offset declines in financials, with investors fretting over the timing of the next interest rate hike.

The main boost came from a 1.5 per cent hike in Apple shares following two straight days of losses. The stock was also chiefly responsible for the S&P 500 technology index 1.17 per cent gain. Perrigo rose 5.7 per cent after activist investor Starboard Value disclosed a stake in the drugmaker and said it must make immediate improvements to revive its stock. The stock was the top percentage gainer on the S&P.

Wal-Mart rose 1.8 per cent to $71.57 after Cowen and Company raised its rating to "outperform" from "market perform". Advancing issues outnumbered decliners on the NYSE by 1,557 to 1,416. On the Nasdaq, 1,494 issues rose and 1,277 fell. The S&P 500 index showed no new 52-week highs and four new lows, while the Nasdaq recorded 18 new highs and 40 new lows.

– Additional reporting by Reuters