Stocks slip and euro gains as ECB holds line on stimulus

A gauge of global equity markets fell modestly and the euro strengthened on Thursday after the European Central Bank fell short of market expectations as it offered few clues on an extension of its bond-buying programme.

European Central Bank president Mario Draghi said the bank was looking at options to enable it to pursue the money-printing programme, but maintained the March end-date for the plan, disappointing investors who were looking for more immediate action.

After a mixed bag of data over the past month in Europe, including poor German industrial orders this week, many market participants had speculated the ECB might take additional actions in order to stimulate euro zone growth.

“Markets had a bit of an expectation built into it,” said Art Hogan, chief market strategist at Wunderlich Securities in New York. “Not getting what is expected is always going to be disappointing, and that has sort of manifested itself a little bit more in currency markets than it has in equity markets.”

DUBLIN

Dublin's Iseq traded marginally up at 6,286. Bank of Ireland had a strong day, trading up 4.6 per cent to close at 19.78 cents, tracking other European financials, who were buoyed by Mr Draghi's comments.

Iseq heavyweight CRH was down 1.6 per cent at €29.99 on the back of quiet week.

Amid the ongoing controversy about rising insurance costs FBD Holdings fell 1.4 per cent to €6.90 having risen by a similar margin in the previous session. Travel software group Datalex traded flat at €3.60 but maintained the gains from earlier in the week.

Ireland's largest food group Kerry saw its shares fall 2 per cent to close at €76.5. Rival Glanbia also fell by 1 per cent, ending the day at €16.90. Paddy Power Betfair remained unchanged at €107.50.

LONDON

UK shares gave up early gains but outperformed European peers after the EuECB move to keep rates steady. Britain’s FTSE closed up 0.2 per cent at 6,858.70, outperforming European shares thanks to sterling weakness, with British companies also less directly exposed to any disappointment from the ECB.

Dixons Carphone, Britain's biggest consumer electricals and mobile phone retailer, was up 4 per cent, touching its highest point since Britain voted to leave the European Union, after it beat forecasts with a 4 per cent increase in quarterly sales. Pearson, however, dropped 7.7 per cent, hurt by share losses at its US peer John Wiley whose first-quarter results disappointed the market.

It was joined by Standard Life and Admiral Group , which both fell after going ex-dividend. Travel group Thomas Cook gained 6.1 per cent after launching a joint venture in China. Also helping the stock, rival Dart Group said summer leisure travel bookings showed no signs of a slowdown.

EUROPE

The euro zone’s Euro STOXX 50 was down 0.3 per cent. The index is down nearly 5 per cent in 2016, although it has rallied over the last two months from lows reached in June after Britain’s shock Brexit vote to quit the European Union.

Chip makers also came under pressure, with Austria Microsystems, ASML and Dialog Semiconductor down 3.6-4.9 per cent, after Apple, a major user of chips, released a new iPhone which analysts said was underwhelming.

However, Rocket Internet fell 4.4 per cent after the German e-commerce investment company cut the valuation of its Home24 online furniture business.

NEW YORK

US stocks were lower on Thursday as a drop in Apple shares weighed, a day after the tech giant unveiled the new iPhone 7 that failed to impress Wall Street. Apple fell 2.2 per cent to $105.98, its steepest decline since June 24th when the markets witnessed a broad selloff following the Brexit vote result.

The S&P 500 information technology index fell 0.6 per cent and was the biggest loser among the benchmark’s 10 major sectors. However, oil prices soared more than 3 per cent, limiting some losses on Wall Street.

The S&P energy index rose 1.18 per cent. Investor reaction to a drop in weekly jobless claims and the ECB’s expected decision to leave rates and stimulus program unchanged was largely muted.

Six of the 10 major S&P 500 indexes were lower, but the defensive sectors including utilities and telecom services were among the gainers. Tractor Supply plunged 16 per cent to $70.21 after the home improvement and pet care products retailer lowered its full-year forecast. The stock was the top percentage loser on the S&P. Tesla fell 1.5 per cent to $198.63 after Cowen and company began coverage of the stock with an "underperform" rating. AbbVie was down 2.1 per cent after JPMorgan downgraded the drugmaker's stock to "neutral" from "overweight" .

– (Additional reporting: Reuters/Bloomberg)