Irish shares fall as memories of rally fade

Irish shares fell on Monday in line with European markets as memories of a strong rally globally last week from a recent sell-off faded.

The Iseq index ended the session down 0.5 per cent at 6,797.74 points, marking its first decline in six sessions, while the pan-European Stoxx 600 index lost 0.6 per cent to 378.24.

US markets were closed as traders on Wall Street observed Presidents Day.

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Permanent TSB lost 1.4 per cent to €2.17 as investors feared that the group's plans to sell up to €4 billion of non-performing mortgages may be scuppered as Fianna Fáil, which is supporting the Government under a confidence and supply agreement, increased its opposition to the disposal of the portfolio to unregulated overseas funds.

Hotel group Dalata lost 1.7 per cent to €5.66, while Ryanair declined 1.4 per cent to €16.53.

Irish Continental Group was also out of sorts, falling 0.9 per cent to €5.75, as analysts at Davy downgraded their view on the stock to "neutral" on valuation grounds.

Bucking the trend Green Reit added 1.2 per cent to €1.534 as investors positioned themselves ahead of the real-estate trust's latest set of results on Tuesday. Cairn Homes gained 0.4 per cent to €1.85 as the market shrugged off news that the group's plans to build more than 400 homes in Maynooth, Co Kildare, could be impacted by water supply issues.

LONDON

UK shares lost some ground as weak results from Reckitt Benckiser underlined the murky growth outlook for big consumer goods makers and banking holidays in the US and China slowed European markets. The FTSE 100 lost 0.6 per cent to 7,247.66 points.

"Investors knew market volatility would be low as the US and Canada celebrate public holidays, and that weighed on enthusiasm," said David Madden, an analyst at CMC Markets.

Reckitt fell the most, down 7.5 per cent, as the group missed 2017 profit estimates and tough trading conditions and rising commodity costs hit its outlook.

Another factor weighing on Reckitt's shares was the heightened expectation of it buying the consumer health business being sold by Pfizer, which could dilute shareholders through an equity capital increase.

Merlin Entertainment's shares raced higher after it was revealed that activist hedge fund ValueAct had taken a stake in the Alton Towers owner. The group was up 4.1 per cent to 356.5p, with ValueAct holding 5.4 per cent of the business, putting it just behind BlackRock Investment Managers, which holds a 5.5 per cent stake.

Away from the top tier, convenience store group McColl's took a tumble, falling more than 3 per cent, after sales suffered from the collapse of wholesaler Palmer & Harvey. Total like-for-like sales for the 11 weeks to February 11th slipped 2.2 per cent, having been "held back" by sales in stores that were formerly supplied by the wholesaler.

EUROPE

European shares, measured by the Stoxx Europe 600 index, fell for the first time in four days as auto and consumer stocks dropped. That contrasted with Asia, where equities built on their best week since September 2016, spurred by a jump in Japanese stocks after the yen weakened.

Europe’s equity gauge has trailed its American counterpart since a global selloff earlier this month, partly thanks to a jump in the euro.

European steel-makers rose after the United States outlined proposals for hefty import curbs. Shares in Tenaris and Outokumpu – which have facilities in the United States – were the biggest gainers in Europe, up 3 per cent and 4.5 per cent respectively.

German industrial giant Siemens rose as much as 1 per cent before turning 0.3 per cent lower after announcing plans to list its healthcare division in the first half of the year.– Additional reporting, Reuters, Bloomberg