European stocks falter as banks lose ground

European stocks faltered after reaching the highest level in almost a year, as banks dragged indexes lower.

Oil prices fluctuated, with gains erased in the afternoon and oil futures edging lower following a report showing a surprise build in US crude inventories last week. The dollar weakened versus the euro, retreating from a 14-year-high against the currency.

Trading volumes thinned ahead of the Christmas break.

Dublin

A quiet day of trading ended with the Iseq down almost half a per cent. Hotels group Dalata fell 0.6 per cent to €4.49 despite publishing a statement saying its 2016 earnings will come in at the top end of the previously forecasted range.

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Building materials group CRH, the largest stock on the index, closed down fractionally at €32.20. The stock remains set to benefit from potentially large infrastructure programmes promised by the future Trump administration in the US.

Bank of Ireland fell 1.7 per cent in line with a difficult day for banking stocks in parts of Europe, while Ryanair fell 1.4 per cent to €14.39.

Food group Glanbia added 2.2 per cent to close at €15.79.

London

The FTSE 100 finished flat after a sluggish day for mining stocks such as Glencore, while oil major Royal Dutch Shell also slipped. Equipment rental group Ashtead and bottler Coca-Cola Hellenic were among the stocks to provide support.

Coca-Cola Hellenic (CCH) was up 1.3 per cent after Coca-Cola bought a majority stake in an African bottling firm from AB InBev for $3.15 billion. Coca-Cola said it planned to hold all operations temporarily until they can be refranchised to other partners.

Shares in Ashtead climbed 1.3 per cent after Credit Suisse raised its target price for the stock, citing a boost for the stock from its US exposure.

Brokers Hargreaves Lansdown fell 3 per cent, while Hikma Pharmaceuticals closed down 1.4 per cent and Alton Towers owner Merlin Entertainments dropped 1.2 per cent.

Rolls Royce Group was among the gainers, advancing 1.3 per cent. Among mid-cap stocks, QinetiQ rose 4.4 per cent after it agreed to buy Meggitt’s defence business.

Europe

Investors breathed a sigh of relief after Italian lawmakers approved a €20 billion rescue plan for some of the country’s weakest banks.

Shares in Italian bank Banca Monte dei Paschi di Siena were down 8 per cent, having earlier dropped as much as 17 per cent on concern it may fail in its efforts to raise €5 billion of funds. The bank said its liquidity may turn negative in four months.

Spanish banks also fell after a ruling in the European Union’s top court that may result in them handing back billions of euros to mortgage customers.

In Germany, the Dax was flat, while in France, the Cac 40 closed down 0.3 per cent.

US

Muted pre-holiday trading on Wednesday saw Wall Street stocks ease as investors pressed the pause button, one day after the Nasdaq Composite and the Dow Jones Industrial Average hit record highs. The Dow continued to flirt with the historic 20,000 level in early trading.

Biotechnology company Celgene fell 2.1 per cent to $116.05. The stock was among the biggest drags on the Nasdaq.

Accenture fell 3.9 per cent to $119.17 after the consulting and outsourcing software services provider's revenue forecast missed estimates.

Twitter fell 3.8 per cent to $17.23 after its chief technology officer said he would be leaving the company, while FedEx fell 2.5 per cent to $193.66 after the package delivery company’s quarterly results missed expectations.

New data showed US home resales unexpectedly rose in November, reaching their highest level in nearly 10 years, likely as buyers rushed into the market to lock in mortgage rates in anticipation of further increases in borrowing costs.

The Federal Reserve announced a quarter-point interest rate rise last week.

– (Additional reporting: Bloomberg / Reuters)