Stocks dip from six-year high as investors await outcome of ECB meeting

European stocks declined from a six-year high as a report showing lower-than-estimated inflation in the euro area prompted investors to weigh the outlook for interest rates before tomorrow's European Central Bank meeting.

Figures out yesterday also showed that euro area unemployment slipped slightly to 11.7 per cent in May while economic activity in China slowed during the same month. Investors fear that the ECB will do little to boost Europe's economy when its policymakers meet.

DUBLIN

In Dublin, the Irish market performed slightly better than its peers, but still slipped over the course of the day.

Banana importer Fyffes rose 2.04 per cent to close at €1.102 after negotiating the first regulatory hurdle facing its proposed merger with rival Chiquita after the waiting period for US anti-trust review expired.

Cider maker C&C climbed 2.07 per cent to €4.593 on the back of suggestions that it is an ideal merger candidate, dealers in Dublin said.

Ryanair added 1.37 per cent to close at €7.28. The low-cost airline yesterday announced a tie-in with UK coach operator, National Express.

Property investors, Green Reit, put in one of the day’s strongest performances, gaining 5.69 per cent to €1.30.

Ferry operator Irish Continental Group was also popular, adding 7.47 per cent to end the day at €28.92.

Index heavyweight, international building materials group, CRH, dipped slightly, shedding 0.1 per cent to close at €20.06. Analysts at Deutsche Bank reiterated their hold rating on the stock.

LONDON

Foxtons Group Plc lost 6.6 percent to 307.9 pence. Chief executive officer Michael Brown will quit the UK real property broker for personal reasons less than a year after its initial public offering. Chief operating officer Nic Budden will replace Brown on July 1st, the company said yesterday. Brown will remain on the board as a non-executive director.

Barratt Developments Plc fell 1.8 percent to 355.2 pence as a gauge of UK construction growth unexpectedly slowed to a seven-month low in May.

Rightmove Plc, the property-website operator, slid 3.5 per cent to 2,211 pence as a gauge of media-related stocks posted the biggest drop of the 19 industry groups on the Stoxx 600.

EUROPE

Eutelsat retreated 3.7 percent to €24.79. Abertis sold its 5.1 per cent stake in the company at €24.95 a-share. CRH rival, Wolseley, rose 1.6 per cent to 3,363 pence. The distributor of building materials and bathroom supplies said revenue in the third-quarter through April 30 increased 5.1 per cent to £3.05 billion.

Pennon slid 3 per cent to 760 pence. Pretax profit at its Viridor waste management unit dropped to £27.6 million, partly due to lower prices for the recyclate it produces. The company said it remains cautious about the division’s prospects.

Irish-Swiss convenience foods group, Aryzta, added 0.18 per cent to close at 83 Swiss francs in Zurich, after reporting that revenues in the three months to the end of April grew 16.5 per cent to €1.37 billion. However, its share price in Dublin dipped 0.59 per cent to close at €67.80.

US

US stocks edged lower in early trading yesterday, receding from record levels as traders found few reasons to buy following a string of gains.

Semiconductor stocks were among the market’s leaders, with the PHLX semiconductor index up 0.5 per cent. The group was lifted after Skyworks Solutions raised its earnings and revenue outlook, sending shares up 5 per cent to $45.23.

Broadcom Corp also gave a boost to chipmakers, up 2 per cent to $35.52. AT&T Inc raised its full-year revenue outlook to 5 percent growth from 4 percent, but shares of the Dow component were essentially flat at $35.42. – (Additional reporting: Bloomberg, Reuters)