Markets suffer Chinese burns after currency woes

Global equities slipped yesterday, hit by weakness in the commodity sector, as concerns over the Chinese economy resurfaced after it allowed the yuan to weaken further, and poor services sector data was reported.

The Iseq in Dublin and the FTSE 100 blue-chip index in London were both down by about 1 per cent while elsewhere in Europe, the Dax in Germany was 0.9 per cent lower and France’s Cac 40 fell 1.4 per cent.

DUBLIN

Several of the big blue-chip, globally focused Irish stocks lost ground, echoing the fears elsewhere for the world economy due to the Chinese currency move.

CRH

was down 2.3 per cent, paper group

Smurfit Kappa

fell 3.2 per cent, while insulation specialist

Kingspan

fell by 3 per cent.

Tullow Oil, which retains a Dublin listing although its main listing is in London, continued its disastrous trajectory, due to further falls in the price of oil. It was down 9.9 per cent on Iseq.

The seemingly endless falls in the price of oil have helped airlines, where fuel costs is the biggest cost. Ryanair, which also announced it had poached from Uber a new lobbying chief, rose by 2.2 per cent.

LONDON

Miners led the retreat, with

BHP Billiton

,

Anglo American

and

Rio Tinto

falling at least 4.5 per cent.

News about a possible nuclear test in North Korea lifted shares in some defence companies, including BAE Systems, which was the best-performing FTSE 100 stock. BAE, which rose 3.8 per cent, got a further boost after RBC analysts tipped the stock.

Royal Mail was also a standout gainer, climbing 1.3 per cent after Barclays upgraded its price target.

Barclays also cut Aberdeen Asset Management to underweight, equal to a sell rating, sending those shares down 1.9 per cent.

Argos owner Home Retail Group lost some of Tuesday's 41 per cent surge after supermarket Sainsbury's surprised the market by revealing it had made a takeover approach for the business, which had been rejected.

Home Retail, which also owns Homebase, was 5 per cent or 6.9p lower.

EUROPE

European energy stocks fell 2 per cent after oil prices slid more than 4 per cent to new 11-year lows as the row between Saudi Arabia and Iran made any co-operation between major exporters to cut output even more unlikely.

Among other stocks moving, Dialog Semiconductor, the chipmaker whose biggest client is Apple, dropped 5.6 per cent after it was reported that the Apple would reduce the first quarter output of its latest iPhones by about 30 per cent. AMS and UK-listed ARM Holdings, also Apple suppliers, lost at least 3 per cent.

French advertising groups Publicis and JCDecaux retreated 4.4 per cent after Exane BNP Paribas cut their ratings to underperform, similar to sell, from neutral, saying it was unlikely that organic growth would recover in the second half of the year.

NEW YORK

Energy and raw-material companies in the Standard and Poor’s 500 Index sank at least 2.6 per cent heading into the afternoon, as China’s move revived the angst that sent financial markets into turmoil last summer.

Chevron declined 4 per cent, while copper producer Freeport-McMoRan slid 6.3 per cent. Apache and Murphy Oil tumbled more than 9 per cent, on their way to the steepest losses in at least a year.

Ford Motors and General Motors continued their losing streaks, down at least 3.1 per cent, after sales reports yesterday disappointed. GM fell for an eighth day, the longest stretch in five months.

AutoNation tumbled 12 per cent, the most since 2009, after saying it expected to report significant margin declines for the fourth quarter amid a tougher sales environment. – (Additional reporting: Bloomberg/Reuters/PA)