Sharp fall in global markets in wake of World Bank report

Global markets fell sharply after a World Bank report slashed world growth forecasts for 2015. Grim sales data from US retailers added to the downbeat mood. It was no different on the Irish market, where the Iseq index lost close to 1 per cent to finish at 5,180.

DUBLIN

The global sell-off, already in train on Tuesday night, continued into Wednesday. “The big sell-off carried into us today, all the major indices are well off,” said a trader in Dublin.

Cider company C&C was the big talking point after warning of lower profits as a result of weaker sales in the final months of 2014. "The third quarter was weaker than thought . . . The tail-off in Q3 was a bit of a surprise I'd say," the trader said. The stock yielded gains made in anticipation of its interim management statement, closing 9.33 per cent weaker at €3.40, and the volume of shares traded was "well above average."

A 2.71 per cent drop to €19.195 in CRH shares was attributed to market conditions generally. Traders said the same was true of a 1.65 per cent drop in Bank of Ireland share to 29.8 cent.

Ryanair dropped 0.15 per cent to €9.845 but volumes were thin. Anticipation of a revised bid from British Airways-owner IAG for Aer Lingus helped keep its shares at bay. Stock in Aer Lingus, in which Ryanair has a big stake, dropped 0.2 per cent to €2.475.

Food group Glanbia took the benefit of a broker upgrade from Jeffries, adding 3.11 per cent to finish at €13.27. Kerry Group was also stronger, gaining 0.54 per cent to close at €59.10.

LONDON

The FTSE 100 Index fell more than 2 per cent to close at 6388.5, heavily hit by the fall in the copper price to a five-year low after the World Bank downgrade cited stagnation in Europe and Japan and a slowdown in China’s expansion.

Shares in commodities giant Glencore tumbled to an all-time low, closing 9 per cent down at 244p. Anglo American was also off 9 per cent at 1042.5p. Chilean miner Antofagasta was 34p down at 675p while BHP Billiton tumbled 72p to 1285p and Rio Tinto was 115.5p lower at 2804.5p.

BT was among just a five stocks making gains, after a bullish note on the telecoms sector from analysts at HSBC. Shares rose 1.6p to 401.4p.

EUROPE

European shares sank in big volumes, knocked down by worries over the pace of global growth. In spite of a positive European court opinion on the European Central Bank’s OMT bond-buying scheme, Germany’s Dax and the French CAC were off more than 1 per cent.

Major oil producers retreated, tracking a renewed drop in crude prices. Royal Dutch Shell shed 3.3 per cent and Eni ended down 3 per cent. Although lower commodity prices should help support the economy in the long term, investors fear the benefits of cheaper oil and metals will be offset by anaemic growth.

NEW YORK

US stocks fell, while bonds rallied around the world as a deepening commodities rout and an unexpected drop in American retail sales fuelled concern that growth is slowing.

The S&P 500 slid 1.2 per cent shortly before lunch hour in New York, pointing to a four-day drop of 3 per cent. Freeport-McMoRan tumbled 12 per cent extending its rout this week to 21 per cent, while energy shares headed for the lowest close in two years.

Copper sank the most since 2011, tumbling 5.2 per cent. The yen rose versus its 16 major peers and US crude erased gains after government inventory data. Retail sales fell last month in a broad-based retreat that will probably prompt economists to cut growth forecasts.

After JPMorgan Chase earnings retreated, US financial shares also sank . "People are starting to get very nervous as commodity prices are faltering and we know it's because the global growth rate has been brought down," Tom Stringfellow of Frost Investment Advisors said. – (Additional reporting by Agencies)