Markets react to fears over China and US

Nervousness about China’s economy and an interest-rate rise in the US were the dominant influence on Irish shares as the session came to a close, according to traders. Strong jobs figures in the US added to fears the Federal Reserve could raise interest rates next week.

In the UK, troubled supermarket Morrisons was under the microscope after revealing a 47 per cent slump in profits and more shop closures as the London market’s rebound hit the brakes.

The Iseq index of Irish shares fell 0.39 per cent, to 6,504.67.

DUBLIN

Ryanair

continued to capture a large share of the Dublin market’s attention, after Wednesday’s announcement that it was raising its full-year profit guidance by 25 per cent. The stock had a lot of activity and finished the session at €13.70, a rise of 0.26 per cent.

There was pullback on such shares as CRH and Smurfit. The former dropped 1.55 per cent to €26.40; the latter dropped 0.19 per cent to €26.55.

Tullow Oil fell by 5.26 per cent to €2.70, while Aryzta fell by 2.53 per cent to €47.90.

LONDON

Britain’s FTSE 100 index fell, extending its early losses as sterling strengthened after the Bank of England sounded less concerned than expected about the domestic impact of the turmoil in global markets.

The central bank’s policymakers voted 8-1 to keep interest rates at a record low and judged it too early to decide whether the market upheaval sparked by China will affect Britain much. Markets expect the BoE to raise rates in mid-2016.

The minutes sent sterling to a two-week high, hitting British listed stocks with international exposure and exporters.

Data from China hit the mining sector, with BHP Billiton falling 5.9 per cent and Glencore down 7.8 per cent. Both stocks also suffered as they went ex-dividend.

The FTSE 100 was down 1.2 per cent at 6,155.81 points at the close, snapping its three-day rally.

Morrisons, Britain's fourth biggest supermarket group, fell 2.8 per cent, giving up its previous day's gains, after it reported a slump in first-half profits.

The UK grocer, which is engaged in a price war with rivals to stem the loss of shoppers to discounters Aldi and Lidl, said its turnaround plan will take time.

EUROPE

European equities rose, with Germany’s benchmark DAX share index outperforming the broader market after strong trade data.

Analysts said a late bounce in Chinese stocks, with the Shanghai Composite Index rising 2.9 per cent after falling earlier, had also improved sentiment.

The pan-European FTSEurofirst 300 index was up 1.2 per cent at 1,415.58 points by the close, while the DAX index was up 1.6 per cent at 10,271.36 points. The French CAC-40 closed up 0.5 per cent, at 4664.6.

Figures showed German exports and imports hit record highs in value terms in July, suggesting foreign appetite for goods from Europe’s largest economy remained robust, despite the slowdown in China, while domestic demand was also holding up.

NEW YORK

Wall Street was higher in early afternoon trading as

Apple

and biotech shares lifted the market ahead of the crucial Federal Reserve meeting next week.

Apple’s 2.1 per cent rise gave the biggest boost to the major indexes a day after the iPhone maker unveiled new offerings.

Biotechnology group Gilead's 4 per cent jump was the second-biggest boost on the S&P and the Nasdaq. The Nasdaq biotechnology index was up about 2 per cent.

Data released yesterday showed the number of Americans filing new applications for unemployment benefits fell last week, suggesting a moderation in job growth in August was an aberration. Initial claims fell by 6,000 to 275,000. – (Additional reporting, Reuter, Press Association)