European values slip to one-month low

European shares slipped to a one-month low in late trading yesterday, tracking a sell-off in US stocks, as a stronger dollar undercut prices for industrial metals and caused mining shares to drop.

Equity values were also influenced by a signal from Bank of England governor Mark Carney that it is getting closer to increasing its benchmark interest rate off its record low. The judgment on when to increase the rate has become "more balanced" in recent months, said Mr Carney.

In early trading, US stocks tumbled the most in eight weeks, as Apple led tech stocks lower.

The Iseq finished the session little changed after morning gains were unwound in the afternoon in tandem with the pattern across Europe.

Building materials group CRH declined 0.6 per cent to €17.94, while the next biggest stock on the index, Ryanair, had a better day, climbing 1.2 per cent to €7.39.

The airline held its annual shareholders meeting in Dublin yesterday and told investors that it expected to reach the upper end of its earnings projections for the current fiscal year.

Among the other main movers, Bank of Ireland advanced 0.7 per cent to 31 cent.

But paper and packaging group Smurfit Kappa slipped 1.8 per cent to €16.47, while there were falls also for drinks group C&C, which closed down 0.6 per cent at €4.28, and dairy producer Glanbia, which finished down 0.8 per cent at €11.31.

The FTSE 100 index of blue-chip stocks declined 1 per cent at the close in London, extending recent losses.

Falling prices for industrial metals weighed on stocks in the sector and prompted a gauge of mining stocks in the FTSE 350 Index to fall 2.6 per cent.

BHP Billiton and Rio Tinto Group, the world's biggest mining companies, slid 2.9 per cent to 1,746p and 2.4 per cent to 3,105p respectively, while Anglo American dropped 3.7 per cent.

The decline in the market was accentuated after the Bank of England governor said the time to increase the benchmark interest rate is getting closer. Mr Carney’s comments hit shares in real estate companies such as Hammerson and builder Persimmon.

EasyJet climbed 2.7 per cent after its rival Ryanair published a bullish outlook statement. Britain's biggest sporting goods retailer, Sports Direct , is also betting that shares in Tesco, down 1.2 per cent, will stop falling. The firm said it has written a put option on a small stake in the embattled supermarket chain.

European stocks fell to a four-week low, erasing earlier gains, with Greece’s ASE Index dropping 1.63 per cent for the biggest decline among 18 western-European national gauges.

Germany’s DAX slid 1.6 per cent, France’s CAC 40 index lost 1.3 per cent, while Portugal’s PSI 20 index declined 1.3 per cent.

Hennes and Mauritz, the owner of H&M, fell 4.2 per cent to 300.50 kronor. Europe's second-biggest clothing retailer reported a decline in third-quarter profitability and warned that higher garment costs will weigh on margins the rest of the year.

Outokumpu Oyj gained 5 per cent to €5.86. The Finnish steelmaker said it expanded a cost-cutting programme by as much as €250 million.

Apple fell 2.9 per cent after reports of problems with its new mobile software update and criticism that its new iPhone handset can bend. Its decline led technology stocks in the Standard & Poor’s 500 Index to their biggest drop since April.

Equities also extended losses on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in Russia in response to sanctions.

Sentiment was also dented by a report suggesting demand for durable goods slumped last month. – (Additional reporting: Bloomberg / Reuters)