Investors fret over potential for global slowdown

The Iseq slumped by 1.2 per cent as a worsening rout in emerging markets and a plunge in oil sparked a broad selloff in US and European stocks. Concern among investors grew that global growth is slowing at the same time the Federal Reserve is setting plans for higher interest rates.

News that German MPs had voted to back a third bailout for Greece also had little positive effect on European markets, with the focus firmly on fears of a fresh slowdown for the global economy as China battles with plunging exports and white-knuckle stock-market moves.

DUBLIN

There weren’t too many bright spots on the Iseq on Wednesday, but

Glanbia

was one. The dairy giant finished the day up 2.2 per cent to close at €18.48, after it posted a strong set of first half results.

Its performance was boosted by the strong dollar, as Glanbia has invested heavily in US nutritional businesses in recent years. With the dollar set to rise along with US interest rates, Glanbia could benefit when it translates earnings back into its home currency.

FBD, the general insurer, fell 0.5 per cent after a late afternoon sell-off to close at 34 cent. A Merrion analyst suggested that it may look to sell €75 million of subordinated debt. The company reportedly must raise up to €100 million to meet new solvency rules.

The biggest drag on the Iseq came from a poor performance by its biggest weighted stock, the building materials giant CRH. It fell more than 2.5 per cent, after opening down and staying there.

The stock is particularly sensitive to projections of global slowdown, although analysts believe it will meet expectations when it reports results next week.

LONDON

UK stocks tumbled for a seventh day, their longest streak of losses since 2011.

Glencore

plunged to a record low, down 9.7 per cent, the most in four years, after reporting a slide in first-half profit.

Anglo American, Rio Tinto

and

BHP Billiton

lost more than 3.5 per cent, with a gauge of miners reaching its lowest level since 2009.

Only a handful of stocks in the blue-chip FTSE 100 index rose.

Admiral Group climbed 3.8 per cent after posting an increase in earnings and number of customers.

Hikma Pharmaceuticals added 2.6 per cent after its chief financial officer said it would consider another large deal when debt is paid down.

EUROPE

Lanxess

dropped the most, sinking 5.6 per cent as Exane BNP Paribas said the maker of synthetic rubber could be replaced by Deutsche Annington Immobilien in the German stock gauge.

Deutsche Annington climbed 1.3 per cent.

Among stocks moving on corporate news, Carlsberg tumbled 9.2 per cent after the world's fourth-biggest brewer reported second-quarter profit that missed estimates, and forecast a drop in annual profit.

Raiffeisen Bank International jumped 6.9 per cent after the second-biggest lender in eastern Europe said net income grew, beating analyst estimates.

NEW YORK

By the early afternoon, the Dow Jones industrial average, the S&P 500 and the Nasdaq were all down by more than 1 per cent.

Caterpillar, DuPont and Freeport-McMoRan paced declines as raw-material and industrial shares slumped more than 1.2 per cent as a group. Energy shares tumbled the most since January as an unexpected increase in US crude stockpiles sent oil prices deeper into a bear market.

Target was little changed at $80.06 after the retailer reported a larger-than-expected rise in quarterly earnings.

American Eagle Outfitters fell 7.1 per cent to $16.98 after the retailer forecast current quarter same-store sales growth that disappointed investors. (Additional reporting: Bloomberg/Reuters)