Markets slump on dire ECB economic warning

Markets slumped on Thursday as the European Central Bank (ECB) warned the euro zone economy could shrink 12 per cent while US jobless figures rose faster than expected.

DUBLIN

Leading Irish stocks slid after a positive start to the day, traders said. Building materials giant and index heavyweight CRH shed 4.97 per cent to close at €27.55 as markets fell.

Insulation manufacturer Kingspan shed 3.53 per cent to €46.50 after reporting that sales fell 35 per cent in the usually busy month of April as Covid-19 hit construction.

Airline Ryanair closed 1.38 per cent down at €10.40. The stock reached €11 at one point in trade on Wednesday before slipping closer to €10 and then regaining some ground.

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Another heavyweight, packaging manufacturer Smurfit Kappa, fell 2.92 per cent to €28.62.

Paddy Power owner Flutter Entertainment provided one of the few bright spots, gaining more than 3 per cent at one point before closing 2.9 per cent ahead at €111.70.

The betting giant announced that its planned merger with Canadian rival, The Stars Group, to create the world's biggest gambling business would close on May 5th.

Ingredients and food processing specialist Kerry Group added 2.35 per cent to €104.70, even though the business pulled its guidance for the year. Kerry had expected earnings to grow by between 5 per cent and 9 per cent this year. Sectoral stablemate Glanbia added 2.33 per cent to €9.68.

LONDON

House builders took a hit on the London market. Berkeley closed almost 3.7 per cent down, Taylor Wimpey fell 5.3 per cent and Persimmon dropped 2.9 per cent.

Irish-headquartered builders' supplier and DIY group Grafton, owner of the Woodies chain, retreated 4.3 per cent. The Irish business is listed on the London market.

Aer Lingus and British Airways parent International Consolidated Airlines Group (IAG) fell 3.65 per cent.

Royal Dutch Shell tumbled 11.37 per cent after the oil major slashed its dividend for the first time since the second World War. Shelltold shareholders that it would cut payout to 16 cents a share from its originally proposed 47 cents.

Reckitt Benckiser rose 3.6 per cent as the maker of Dettol, Air Wick and Harpic announced that first-quarter sales growth broke previous records. It predicted a stronger than expected performance in 2020 as shoppers stocked up on essentials during the prolonged coronavirus lockdown.

EUROPE

Shares in BE Semiconductor topped the Europe-wide Stoxx 600 with a 13.3 per cent jump to €37.56 after the Dutch company forecast a rise to second quarter revenue.

Brewer Carlsberg's shares added 0.4 per cent. Mobile phone maker Nokia's stock climbed 3.1 per cent.

The Stoxx 600 Index fell amid a barrage of bad economic readings and after ECB president Christine Lagarde said the euro zone economy could shrink 12 per cent this year.

Government bonds gained as the ECB intensified its response to the coronavirus crisis.

US

Wall Street's main indices fell on Thursday after a strong month of gains as millions more Americans applied for jobless claims, taking the shine off a strong rally this month and eclipsing upbeat results from Facebook and Tesla.

Investors will now focus on earnings reports from Apple and Amazon, due after markets close on Thursday. Facebook jumped 5 per cent after the social media giant posted better-than-expected quarterly revenue.

Market-leading growth stocks such as Facebook, Apple, Amazon, Netflix and Alphabet, the so-called FAANG group, have gained between 12 per cent and 25 per cent this month. – Additional reporting: Reuters, Bloomberg