Poor US growth data triggers global sell-off

European stocks tumbled the most since September, pulling back from their recent highs after a report showed the US economy grew by just 0.2 per cent annual rate in the first quarter, a much slower pace than had been forecast and well below the fourth-quarter growth rate of 2.2 per cent.

The disappointing figure prompted the FTSE 100 to slip to a three-week low, while the Iseq also lost ground.

Investors were also waiting for a statement from the Federal Reserve, which was due after European market closed.

The statement was expected to be scrutinised for hints about the timing of a possible interest rate increase in the US, where rates have been kept near zero since late 2008 to spur economic recovery. An imminent rise is less likely following the lower-than-anticipated growth.

DUBLIN

The Iseq index retreated 3.3 per cent, led by heavy falls for major stocks

CRH

and

Ryanair

. The cement-maker slipped 4.5 per cent to €25.25 amid negative sentiment following the release of poor US growth data, while the airline fell back 3.1 per cent to €10.62 as oil prices rose.

Bank of Ireland lost about 2 cent to close just below 35 cent, which worked out as a decline of more than 6 per cent, while insulation maker Kingspan was also a heavy faller, closing the session down 3.9 per cent at €17.75. Another cyclical stock, paper and packaging group Smurfit Kappa, fell 4.8 per cent to finish at €26.70. But there were losses across the board, with food groups Kerry and Glanbia and beverage company C&C also ending the day in the red.

Aer Lingus, Irish Continental Group and Origin Enterprises were among the few stocks that managed to stay ahead on a day otherwise marked by cautionary profit-taking by investors.

LONDON

UK stocks slumped the most in almost a month after swinging between gains and losses, led by a drop in miners including

BHP Billiton

and

Rio Tinto

. The FTSE 100 Index dropped 1.2 per cent at the close in London, after gaining as much as 0.4 per cent earlier in the day.

Antofagasta dropped 2.2 per cent after cutting its copper production forecast for the year. BHP Billiton and Rio Tinto fell at least 1.6 per cent.

Barclays dropped 1.7 per cent after setting aside another £800 million to cover potential settlements for foreign exchange manipulation.

Traders said the UK stock market was likely to stay choppy until the election, when a drop in British consumer confidence may work against prime minister David Cameron.

EUROPE

Germany’s Dax index plunged 3.2 per cent, the most in a year and among the biggest retreats in western-European markets. Exporters slid following a rally in the euro.

Carmakers had the worst drop among the industry groups, with both Continental and Volkswagen declining at least 4 per cent.

Banco Bilbao Vizcaya Argentaria dropped 3.8 per cent after the Spanish lender said net interest income declined from the previous quarter. Storebrand slid 11 per cent after reporting that profit declined more than estimated.

French luxury goods maker Hermes International climbed 1.1 per cent after quarterly sales increased by 8 per cent, helped by a strong performance in Japan.

NEW YORK

Stocks in the US fell amid a global sell-off in bonds and equities as data showed the economy barely grew in the first quarter. Eight of 10 main industries in the Standard and Poor’s 500 Index declined, with healthcare and technology shares dropping 1 per cent.

Higher oil prices also pushed down airline stocks, with United Continental falling 5 per cent to $58.45, American Airlines declining 5.7 per cent to $48.30, Delta slipping 3.7 per cent at $44.51 and Southwest Airlines dropping 4 per cent to $40.24.

(Additional reporting: Bloomberg/Reuters)