Iseq follows other European markets lower

European stocks declined yesterday, after posting a ninth weekly gain in 10, as investors watched developments in Iraq and as euro-zone manufacturing weakened.

The Stoxx Europe 600 Index lost 0.5 per cent, the most since June 11th, closing at 346.31 after earlier sliding as much as 0.7 per cent. This is after the gauge advanced 0.3 per cent last week, closing 0.5 per cent away from a six-year high, as the US Federal Reserve pledged to keep interest rates low for a prolonged period.

National benchmark indexes retreated in 14 of the 18 western-European markets. France’s CAC 40 slipped 0.6 per cent and Germany’s DAX retreated 0.7 per cent. The FTSE 100 fell 0.4 per cent.

The Iseq was one of the worst performing indices, closing down 1 per cent or 48.38 points to 4,764.54.

Dublin In what was a sluggish day in Dublin, share prices were generally lower with volumes weak. Ryanair and Aer Lingus both started the week in negative territory as investors turned away from airlines on the back of concern over oil prices arising from the ongoing crisis in Iraq. Aer Lingus closed 3.1 per cent lower at €1.40 while Ryanair was down 1.1 per cent at €6.80.

Elsewhere, Bank of Ireland shares remain unsettled following the decision of US investor Wilbur Ross to sell his entire holding in the bank. The stock has struggled to get back on track and closed down 3 per cent at 25 cent.

Other movers included Green Reit, which closed down 4.9 per cent to €1.26 and CRH, down 2 per cent to €19.78. C&C, which lost ground last week, eased losses to close down 1.28 per cent at €4.69.

London Britain's top equity index fell yesterday for the first time in a week as declines in house-building shares weighed on the market, which had been approaching record highs.

House builder Barratt Developments fell 9.8p to 350.8p and rival Persimmon dropped 14p to 1,216p. The companies were hit by comments over the weekend from David Miles, seen as one of the Bank of England's most dovish policy-makers, who said it was increasingly likely he would vote to raise interest rates before leaving the bank's monetary policy committee next May.

Kentz rallied 32 per cent to 929p after it was announced SNC-Lavalin is to acquire it in a deal valued at €1.5 billion. The Montreal-based engineer will pay 935p a share, a 33 per cent premium to last week’s close.

With oil prices falling on the Iraqi conflict and the effect of a French air traffic control strike, airline stocks were back under pressure as International Airlines Group fell 4.7p to 379.9p and EasyJet dropped 29p to 1,423p.

Other fallers included Royal Bank of Scotland, which dropped 7.2p to 330p, while Lloyds Banking Group was 1.3p lower at 75.5p.

Europe Alstom dropped 4.1 per cent to €26.85, the lowest price in two months. Bouygues will sell as much as 20 per cent of Alstom to the French state, meeting a condition set by the government to back the GE deal. Bouygues slid 2 per cent to €31.64 . Siemens, which had also made an offer, lost 1.7 per cent to €98.57 .

Distribuidora Internacional de Alimentacion advanced 2.9 per cent to €6.75 after the Spanish discount grocer said it would sell its French business to Carrefour.

New York US stocks were little changed in early trading yesterday following a six-day rally in the benchmark S&P 500 and a mixed bag of global economic data.

The Dow Jones industrial average fell 22.94 points, or 0.14 per cent, to 16,924.14; the S&P 500 lost 0.41 points or 0.02 per cent, to 1,962.46; and the Nasdaq Composite dropped 2.07 points or 0.05 per cent, to 4,365.96.

Wisconsin Energy said it would buy Integrys Energy Group in a deal valued at $9.1 billion. Integrys shares jumped 14.6 per cent to $69.87.