European stocks slipped yesterday to record their worst week in more than a month, in the wake of China’s currency devaluation.
The euro zone’s blue-chip Euro Stoxx 50 index closed down 0.7 per cent. The broader pan-European FTSEurofirst 300 index retreated 0.1 per cent to record a loss of 3 per cent over the week, its worst weekly performance since early July.
“The engineered part of the devaluation seems to be over, but since market forces are meant to play a larger role, the yuan would drift lower,” wrote analysts at Brown Brothers Harriman. “What we know is that the [People’s Bank of China] will continue to manage the currency closely.”
DUBLIN
In contrast to European counterparts, the Iseq index of Irish shares closed up 18 points at 6,520.
Among the main movers was insurer FBD, which closed 7.6 per cent up at €6.90 after falling by a similar margin in the previous session. The group has been stung by a serious of reports suggesting it may need up to €100 million in fresh capital to meet new EU solvency rules, due to come into force next year. It is also reeling from the shock departure of chief executive Andrew Langford earlier this month.
Swiss-Irish food group Aryzta rose €1.34 or 2.9 per cent to finish at €47.50 but still remains way off its 12-month high of €76 amid persistent rumours about the underperformance of its US business. Other positive performances were put in by food groups Kerry and Glanbia, which rose 74 cent to €69.31 and 17 cent to €17.65 respectively. Bank of Ireland fell marginally to €0.36 while Permanent TSB was unchanged at €5.01.
LONDON
The London market moved lower weighed by a slowdown in euro zone growth and falling oil prices as a parliamentary vote in
Greece
approving its €86 billion bailout package failed to spur stocks.
The FTSE 100 Index initially added more than 30 points but was later 17.6 points down at 6550.7 – adding to a fall of more than 150 points over the last few days.
The top flight has fallen by 2.5 per cent, or 167.8 points, since the previous Friday's close. BP shares fell 1 per cent while Royal Dutch Shell dipped 19.5p to 1814p.
Thomson and First Choice owner TUI led the top-flight risers' board as it built on a 7 per cent surge in the previous session. Despite an impact of up to £32 million from the Tunisia terrorist attack, the travel operator posted a surge in earnings.
EUROPE RWE fell 2.4 per cent after Natixis and UBS cut their price targets on its shares, but payment services company Ingenico rose 5.6 per cent after gaining entry to the MSCI World Index.
The Euro Stoxx 50 and FTSEurofirst remain up around 10 per cent since the start of 2015, as economic stimulus measures from the ECB have helped to prop up the region’s stock markets.
Morgan Stanley equity strategists said investor sentiment could also be boosted if investors interpreted China's yuan devaluation as a precursor to more action from Beijing to bolster China's economic growth.
NEW YORK
US stocks inched higher yesterday evening after upbeat economic data and gains in retailer shares, though a decline in energy shares limited the move up.
JC Penney and Nordstrom both rose after the department store chains posted better-than-expected quarterly results. JC Penney was up 5.1 per cent at $8.48 while Nordstrom jumped 3.7 per cent to $77.72 and was among the biggest percentage gainers in the S&P 500, while the S&P retail index was up 0.4 percent.
Energy shares dipped and the energy index was the only S&P 500 index in negative territory for the day. Still, the energy index was on track for a gain of 3.2 per cent for the week, its biggest since March. – (Additional reporting by Reuter/Bloomberg)
