European markets dragged down as euro strengthens against dollar

European equities ended lower yesterday, dragged down by exporters as the euro strengthened against the dollar after the US Federal Reserve flagged fewer rate rises this year than previously expected.

Mining companies, however, were among the beneficiaries as a weaker dollar made metals more affordable to consumers who buy them in non-dollar currencies, boosting metals such as copper and aluminium.

The pan-European FTSEurofirst 300, Germany’s Dax and France’s Cac closed 0.1 to 0.9 per cent lower a day after the US Federal Reserve held interest rates steady. Policymakers now expect two quarter-point increases by the end of the year, half the number forecast in December.

DUBLIN

The Iseq index traded down 0.3 per cent at 6,141, in line with other European bourses.

Swiss-Irish food group Aryzta capped off a torrid few days with shares falling marginally to €33.14, having been up 2 per cent for most of the session. Shares nosedived on Wednesday after chief executive Owen Killian added to the company's woes by announcing he had sold almost two-thirds of his own holding.

Bank of Ireland was up 1.2 per cent at €0.26 with a significant volume of shares traded. Permanent TSB also had a good day, trading up nearly 5 per cent at €2.79 but on lightish volumes.

Drinks group C&C hit the €4 mark for the first time in nearly a year after a more positive trading update last week.

Ryanair finished the day 3 per cent down at €13.23, following more cautious comments about the sector from rival Lufthansa. Stronger oil data from the US anchored the airline stocks.

Reweights on the FTSE tomorrow, whereby funds have to buy certain stocks to maintain their portfolio balance, saw Hibernia Reit's share rise 2.2 per cent to €1.30.

LONDON

The London market closed higher, shrugging off warnings from policymakers in Europe and the US about slowing growth across the global economy. The Bank of England left interest rates at 0.5 per cent and warned that Brexit might "depress growth" in the near term.

The FTSE 100 index lifted 25.6 points to 6,201.1, reversing a fall of some 30 points in afternoon trading following disappointing European data and warnings from key central bankers.

Soft drinks makers fell, however, after British chancellor George Osborne slapped a levy on sugary drinks in a bid to fight childhood obesity.

Robinsons owner Britvic was down 2 per cent, or 12.5p, at 687p, and Irn Bru maker AG Barr fell more than 5 per cent, or 29.5p, to 511p.

GlaxoSmithKline fell 12.5p to 1399.5p after the pharmaceuticals giant said chief executive Sir Andrew Witty will step down in March 2017.

The biggest risers in the FTSE 100 index were Fresnillo, up 91.5p at 1,007p, Anglo American, up 48.2p at 540.9, Glencore, up 13.7p at 158p, and Antofagasta, up 41.1p at 537.5p.

EUROPE

The European banks index fell 1.2 per cent, with KBC, Deutsche Bank, Unicredit and Commerzbank down by between 2.4 per cent and 4.2 per cent. Bucking the trend, the Stoxx Europe 600 Basic Resources index surged 6.4 per cent on the dollar weakness.

Shares in BHP Billiton and Rio Tinto jumped by between 5.4 per cent and 9.5 per cent.

Banco Popolare slumped 14 per cent, hit by speculation that merger talks with Banca Popolare di Milano to create Italy's third-largest lender, could break down.

The stock also came under pressure after Reuters reported that the European Central Bank has sent a letter to the two companies setting out conditions for approval of the merger. Banca Popolare di Milano was down 5.6 per cent.

Immofinanz shares fell 11.5 per cent after reporting a loss, while Vienna Insurance slumped 17.9 per cent after its results disappointed investors.

NEW YORK

Wall Street edged up early yesterday as FedEx and GE shares lifted the industrials sector, a day after the Federal Reserve's lowered projection of two interest rate hikes in 2016 pushed the S&P 500 to its highest close this year, up 12.41 points, or 0.61 per cent, at 2,039.63.

Crude prices held on to strong gains as the dollar weakened and the market pinned its hopes on a plan by major oil producers to freeze output to mitigate a global glut.

The Dow Jones industrial average was up 135.98 points, or 0.78 per cent, at 17,461.74.

The S&P healthcare was the only laggard among the 10 major S&P sectors. The sector fell 1.38 pe rcent, dragged down by Eli Lilly's 5.2 per cent fall. Industrials gained 2 per cent, propped up by General Electric's 2.9 per cent rise to $31.06. FedEx was up 10.9 per cent at $160.01 after the package delivery company forecast better-than-expected full-year earnings. The stock gave the biggest boost to the S&P 500.

– Reuters/Bloomberg