Global stock rally stalls as investors reconsider positions

A rally in major world stock markets stalled on Thursday as investors reassessed positions after the US presidential election, while US bond yields continued to climb on fears of a revival in inflation resulting from potential expansionary fiscal policy under president-elect Donald Trump.

Investors have quickly shifted to a focus on Mr Trump’s priorities, including tax cuts, an increase in defence and infrastructure spending, along with bank deregulation.

Stocks reversed course and turned negative, with utilities down more than 4 per cent in Europe. Wall Street was pulled lower in early trading by a drop in the technology sector, which was on track for its biggest decline since late June.

DUBLIN

The Iseq ended the day flat at 6.229.69 points in line with the rest of Europe after a two-day rally from heavyweight CRH petered out.

Shares in the building materials group, which advanced more than 8 per cent on Wednesday on reports it will benefit from a rise in infrastructure spend under a Trump presidency, were trading up 5 per cent during the day but gave up those gains to close up just 27 points to €32.37.

Kingspan, the maker of insulation boards and raised access flooring, has also enjoyed a good run on the back of Mr Trump's win. It ended up 2 per cent to €24.05.

Bank of Ireland gained nearly 4 per cent to 21 cents on decent volume while Permanent TSB closed up 3 per cent to €2.60 after it said it continues to trade in line with expectations.

Hibernia Reit, which also updated investors on Thursday, slumped 6.5 per cent to €1.20 after it alluded to a slight slowdown in the pace of valuations. It dragged down Green, which ended the day down 4.3 per cent to €1.25.

Kerry Group continued its poor run, losing 4.89 per cent to close at €62.70, due in part to a potential negative rating on two of its peers. Glanbia was down 2.9 per cent to €15.

Independent News and Media gained 6 per cent on low volumes to close at 12 cents after it proposed a restructuring of its balance sheet.

LONDON

The FTSE 100 lost its morning gains, sinking 83.86 points to end 6,827.98, after precious metals stocks took a tumble following a heady rise in the previous session.

London-listed Irish pharmaceutical firm Shire rose 4 per cent, as drugs companies were given a Trump bump as traders speculated over the negative implications for Obamacare.

But in a contrast of fortunes, rival pharmaceutical firm AstraZeneca was down 171 pence after positing weaker-than-expected third quarter results.

Diaego lost 3 per cent to end at 1,992.5 pence, as the drinks giant is seen as being one of the worst hit by Mr Trump’s victory and the falling dollar, given that it makes a large proportion of profit in the United States.

EUROPE

European shares ended slightly lower on Thursday as expectations of fiscal stimulus from Mr Trump boosted government bond yields, prompting losses among utilities which more than outweighed stronger financial stocks.

The pan-European STOXX 600 ended down 0.3 per cent after rising to a two-week high earlier in the session.

Dutch insurer Aegon surged 13 per cent, further boosted by a better-than-expected earnings update. It helped the European insurance index to rise 2.9 per cent, topping sectoral gainers, while banks followed with a rise of 2.3 per cent.

French media giant Vivendi rose 8.9 per cent after reporting a third-quarter core operating profit above forecasts following a strong performance by its music unit.

WALL STREET

The Nasdaq lost ground sharply on Thursday, dragged down by a slide in technology stocks, as investors poured money into sectors that may benefit from Donald Trump’s victory. The S&P 500 extended its losses to trade lower, while the Dow hit a record intraday high earlier in the session.

Apple was down 2.7 per cent at $107.90, while Amazon was off nearly 5 per cent. The S&P 500 technology index plunged 2.02 per cent and was on track for its worst day in two months.

The Dow Jones industrial average was up 155.01 points, or 0.83 per cent, at 18,744.7. The S&P 500 was up 0.15 points, or 0.01 per cent, at 2,163.41 and the Nasdaq Composite was down 64.73 points, or 1.23 per cent, at 5,186.34.

Goldman Sachs’ 3.5 per cent gain and IBM’s 2.8 per cent advance were chiefly responsible for the Dow regaining some of the momentum it lost earlier in the day. Macy’s rose 7.9 per cent to $41.38 after it raised its full-year sales forecast and announced a partnership to monetise some of its property assets.

– (Additional reporting: Reuters)