Stocks slide towards two-year lows

Stocks around the world fell for a fifth day

yesterday, sliding towards two-year lows as worries lingered over global growth and as the scandal over Volkswagen’s emissions test-cheating rattled Europe’s carmakers.

DUBLIN

The markets were down everywhere yesterday and the Dublin market was no different. Iseq fell 2.8 per cent to 6,197.81 on what was a “rocky day”, according to one analyst.

The construction sector was weak in all markets, on the back of brokers notes on Caterpillar which were not too enthusiastic. Building materials giant CRH fell 4.79 per cent, to €23.78, as a result.

Ryanair also performed badly, falling 4.28 per cent to €13.19. The airline yesterday announced plans to distribute the €398 million from the sale of its stake in rival Aer Lingus to shareholders. There was also weakness in Smurfit Kappa which ended the day down 2.4 per cent, at €24.52.

Bank of Ireland did well relatively speaking and was one of the few to end the day on a positive note, with decent volume. Some 80 million shares were traded and the stock finished up 0.6 per cent, at 33 cent.

LONDON

Britain’s blue-chip share index fell, with basic resources and energy companies coming under fresh selling pressure due to lingering concerns about demand for metals and a poor outlook for commodity prices.

The UK mining index and the oil and gas index slid 3.1 per cent and 2.0 per cent respectively, dragged down by a 2.2 to 9.6 per cent drop in shares of Glencore, Anglo American and BHP Billiton.

On the positive side, Lloyds rose 1.2 per cent after the Telegraph newspaper reported that Alex Wright, a fund manager at Fidelity, expected Lloyds to become a dividend giant within two years.

Retailer Next was up about 0.5 per cent after a price upgrade from broker Nomura, which cited the company's multiple opportunities to grow both domestically and overseas.

The FTSE 100 index ended 1.2 per cent lower, at 5,962.26 points.

EUROPE

European shares closed lower as investors fretted over the risks to the region’s economic recovery from an car-emissions scandal at Volkswagen .

The declines brought European indexes close to their 2015 lows and came as concern about global growth and apprehension about a speech by US Federal Reserve chair Janet Yellen sent Wall Street into the red.

BWM dropped 5.1 per cent after a report in Auto Bild said some of its diesel cars were found to exceed emissions standards. Volkswagen shares – which had closed up 5.2 per cent on Wednesday – advanced another 0.6 per cent as investors took the resignation of chief executive Martin Winterkorn as a sign the company would tackle the problem. The stock lost about a third of its value in the previous sessions.

The euro zone’s blue-chip Euro Stoxx 50 index ended down 2 per cent, at 3,019.34 points.

US

US stocks fell about 1.5 per cent in late morning trading as Caterpillar’s sales forecast cut dragged down industrials and exacerbated concerns of slowing global economic growth.

Caterpillar fell as much as 7.9 per cent to its lowest level since 2010 after the world's biggest mining and construction equipment maker slashed its 2015 revenue forecast and said it could cut up to 10,000 jobs.

Caterpillar pulled down shares of other industrial companies. The S&P industrials index fell 1.83 per cent, the biggest decliner among the 10 major S&P sectors.

Mining equipment maker Joy Global fell 4.5 per cent, while Boeing was down 3.3 per cent and General Electric declined 1.8 per cent.

At 11am New York time yesterday, the S&P 500 was down 1.32 per cent and the Nasdaq composite was down 1.49 per cent. – (Additional reporting: Bloomberg, Reuters)