Values decline on gloomy global data

GLOBAL MARKETS suffered their biggest falls in three months yesterday after a report showed Europe’s economy contracted and predictions of slower economic growth in China persisted.

Concerns that Greece and its bondholders may not meet the Thursday deadline for a debt swap also added to the negative sentiment.

DUBLIN

THE MARKET participated in the general sell-off with virtually all stocks ending the session in negative territory.

Even names that have reported strong results of late failed to withstand the broader market sentiment, with all of the most familiar stocks finishing lower.

Cyclical, material-related stocks including CRH, Kingspan and Greenspan experienced sharp falls. CRH tumbled by 5 per cent to €15.30, Kingspan lost almost 3 per cent to €7.93, while Grafton Group, which reports full-year results today, closed down 1.2 per cent at €3.29.

Aer Lingus finished off 1.6 per cent at €0.866 after the airline said that passenger numbers rose last month.

Fruit distributor Total Produce was the latest company to report full-year results, posting a 2.3 per cent rise in operating profits, despite the impact of last year's E.coli outbreak on the profitability of its euro zone businesses. The stock, which is listed on the ESM market, fell by more than a cent, or 2.4 per cent, to close at €0.45.

Fyffes, which yesterday evening announced the appointment of Intel’s Jim O’Hara as non-executive director of the company, closed down fractionally at €0.42.

Despite posting strong results on Monday, Paddy Power failed to escape the sell-off, shedding a half a per cent to finish at €45.64, despite competitor Betfair posting third-quarter results in line with expectations.

Banking stocks were under pressure in line with the European trend, with Bank of Ireland losing 6 per cent to close at €0.124.

EUROPE

NATIONAL benchmark indexes fell in all of the 18 western European markets except Greece. France’s CAC 40 dropped almost 3.3 per cent and Germany’s DAX slid by 3.06 per cent as the EU’s statistic office reported that the European economy shrank 0.3 per cent last quarter.

Banking stocks led the falls. Commerzbank lost 6.1 per cent to €1.78. Société Générale declined 6.8 per cent to €23.25.

Cable and Wireless Worldwide dropped 6.5 per cent to 31.3p, following media reports that Vodafone may not make an offer for the company by a March 12th deadline. Vodafone, the world’s largest mobile-phone company, said last month it was in the early stages of evaluating a bid for Cable and Wireless.

A gauge of mining-company shares slid 2.7 per cent as metal prices fell in London. Nyrstar lost 4.6 per cent to €6.39, Eramet, a refined nickel producer, tumbled 6.4 per cent to €106.90 while Kazakhmys, Kazakhstan’s biggest copper producer, retreated 2.6 per cent to 926.5p.

Michael Page International, a recruitment services company, tumbled 7.5 per cent to 443p. The stock was cut to “neutral” from “buy” by Citigroup. Q-Cells SE, a solar-cell maker, plunged 12 per cent to 24.9 cents, its lowest on record, after losses exceeded sales in the fourth quarter and the firm forecast further losses in 2012.

UK

STOCKS RETREATED, sending the FTSE 100 Index down the most this year, as investors weighed the private-creditor support for a deal that Greece needs to restructure its debt. Lonmin led a gauge of mining shares to a two-month low as metals prices declined.

Aviva lost 4.7 per cent after analysts downgraded the insurer. Meggitt slid 4.9 per cent after the company reported earnings.

The benchmark FTSE 100 dropped 1.86 per cent at the close in London, its largest sell-off since December 14th. The FTSE has advanced for three straight months amid better-than-estimated US economic reports and speculation that the euro area would contain its debt crisis.

US

STOCKS WERE on track to post their worst day so far in 2012 as recent government data rekindled concerns about global growth and a deadline loomed for private holders of Greek debt to agree to hefty losses.

Volatility soared, with the CBOE volatility index at levels not seen since November.

Stocks retreated and the Standard and Poor’s 500 Index was poised for its worst drop of the year.

Traders sold stocks in large banks on concern about their exposure to Greece. The SP financial sector dropped 1.54 per cent at and the KBW bank index fell 2.4 per cent. Morgan Stanley fell nearly 5 per cent to $17.38.

Basic materials stocks were also hurt as commodity prices fell, pressured further by a stronger dollar. Aluminium producer Alcoa was off 3.3 per cent to $9.54 and Freeport-McMoRan Copper Gold lost 3.3 per cent to $38.98. – Additional reporting Reuters/Bloomberg