Markets slide amid fears over Greece

RETURNING WARINESS about Greece and its prospects, as well as concerns about the price of oil and some less than impressive new economic data, made for a cautious day in the markets yesterday.

Traders in Dublin said the tone was one of profit-taking but that in the context of the rally since the start of the year, the pull-back was not particularly aggressive.

DUBLIN

BANK OF Ireland suffered most from the renewed concerns about Greece and the fragility of the European banking system. In line with its counterparts around Europe, it had a bad day on the markets, not helped by a “sell” call on Tuesday from Goodbody.

The stock finished at €0.13, a fall of 6.76 per cent on the day.

The ongoing tensions over Iran and their effect on oil supply outmatched weak economic data in Europe and China that cast doubt on the global growth outlook to contribute to rising oil prices.

Together these factors contributed to a general lack of appetite for airlines, contributing to Ryanair’s fall of 1.99 per cent, to close at €4.08.

Aer Lingus, however, bucked the trend for airline stocks, with market speculation about the possibility that the Government might sell its remaining stake in the former commercial semi-state. The stock closed unchanged on the day, at €0.94, .

Independent News & Media was weaker on the day, falling by 4.17 per cent to close at €0.23.

Building group Grafton continued to perform well. It closed at €3.36, a rise of 1.85 per cent.

Kenmare Resources, which has enjoyed a good run recently on takeover speculation, fell back by 6.58 per cent, to €0.68.

Industry heavyweight CRH closed at €16.08, a drop of 0.22 per cent, less than the fall in the Iseq index, which slid 0.53 per cent.

LONDON

BRITAIN’S LEADING share index edged lower as investors refocused on fundamentals, specifically weaker-than-expected euro zone data, with the Greek debt restructuring theatricals out of the way for now.

Recession concerns increased after data showed the euro zone’s service sector shrank in February, with Europe being Britain’s main market for its goods.

Banks were the biggest blue chip fallers, extending Tuesday’s weakness seen after the second euro zone bailout for Greece failed to alleviate concerns about the debt-laden country.

Royal Bank of Scotland was a big sector faller, down 3.1 per cent as investors took a cautious stance ahead of the lender’s full-year results due today.

Barclays also fell, down 3.5 per cent, albeit as the stock traded ex-dividend. Carnival and Reckitt Benckiser also traded without their payment attractions, knocking 3.5 points overall off the FTSE 100.

The FTSE 100 index ended down 11.65 points, or 0.2 per cent at 5,916.55.

EUROPE

EUROPEAN STOCKS retreated for a second day again because of data showing how services and manufacturing output in the euro area unexpectedly contracted in February.

Straumann Holding, the world’s biggest maker of dental implants, fell the most in three years after full-year profit missed analysts’ estimates.

TUI, Europe’s largest travel company, also declined 8 per cent after Banco CAM SAU sold a 12.9-million block of shares.

France’s CAC-40 Index fell 0.5 per cent and Germany’s DAX Index retreated 0.8 per cent.

Peugeot surged 12 per cent to €16.06, the most since April 2009. The company, which last week reported a slump in profit and an increase in debt, is in talks on a possible alliance with General Motors, French labour minister Xavier Bertrand said.

Klepierre, France’s second-largest publicly traded shopping centre owner, rose 1.4 per cent to €23.88 after La Lettre de LExpansion reported that BNP Paribas is in talks to sell its 51 per cent stake in the company to Norway’s Norges Bank.

Accor, Europe’s biggest hotel company, rose 2.4 per cent to €26.82 after full-year profit rose 19 per cent.

US

US STOCKS fell a day after the Standard & Poor’s 500 Index failed to hold at an almost four- year high, as sales of previously owned houses missed estimates and data from Europe and China spurred growth concern.

Toll Brothers and KB Home each dropped 5.2 per cent to pace a slump in home builders.

Dell, the third-largest maker of personal computers, sank 6.4 per cent after its sales forecast missed estimates.

Financial shares had the biggest loss in the SP 500 among 10 groups, falling 1 per cent.

Gannett, the owner of 82 newspapers including USA Today, surged 4.5 per cent as it will more than double its quarterly dividend.– (Additional reporting, Reuters, Bloomberg)