Equities fall as bond sell-off deepens across Europe

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European equities fell as investors grew doubtful the year-to-date rally could keep up its recent pace. A bond sell-off deepened across the continent, and equities dropped for a fifth straight day, the longest losing streak since November.

The price of oil took a tumble after the strong US dollar knocked back gains from the previous session, when a report showed Opec-led supply cuts were helping to counter rising US production.

On Wall Street, the S&P and the Dow Jones were headed for their worst week in two years on Friday, as robust US jobs data pushed up bond yields further and boosted chances of more interest rate hikes this year.

The Iseq market closed down 0.9 per cent, underperforming the London market but outperforming the major indices in Germany, France and Spain. Ryanair gave up more of its recently won ground, falling 1.7 per cent to €16.14, while building materials group CRH fell almost 1.9 per cent to €28.89.

Shares in IFG plunged after an unscheduled trading update in which it outlined plans to sell off one of its two UK businesses, with the stock down 17 per cent at one point. However, the share price recovered over the course of the day and closed down 2.9 per cent at €2.00.

Glenveagh Properties was among the fallers, closing down 3.25 per cent at €1.19, while Cairn Homes retreated 1.8 per cent to €1.92. Paper and packaging group Smurfit Kappa rose 1.5 per cent to €29.24 ahead of its full-year results next week.

The blue-chip FTSE 100 index closed down 0.6 per cent, its fourth day of straight losses, and suffered its worst weekly decline since late April last year.

BT Group shares hit a five-year low before paring losses slightly to close down 2.2 per cent, after the telecoms firm reported third quarter earnings.

AstraZeneca shares bounced back from an initial slide to lead the FTSE, up 3.1 per cent at the close, as analysts focused on stronger earnings despite 2018 guidance that came in below estimates.

Vodafone was a late gainer, ending the session up 2.4 per cent after it confirmed talks with Liberty Global about potential asset swaps in Europe.

Commodities stocks, which had supported the index early in the session, were the biggest weight by the close.

Shares in miners Glencore, Evraz, Antofagasta and Anglo American fell 2.3 to 4.3 per cent. Oil majors were also a drag. BP shares fell 2.4 per cent after Norway’s Aker BP, in which BP holds a 30 per cent stake, reported earnings that missed forecasts.

The Stoxx Europe 600 Index decreased 1 per cent, hitting the lowest point in a month after a week of consecutive losses. Germany’s DAX dipped 1.3 per cent, hitting the lowest in more than four months with its fifth straight decline, while in France, the Cac 40 closed down 1.6 per cent, and the Spanish Ibex ended 1.8 per cent lower.

In Germany, Deutsche Bank dropped 6.6 per cent to €13.84 after disappointing results, while Volkswagen fell 3.26 per cent to €172.00.

New York
The Dow Jones Industrial Average dropped more than 400 points in early trading, while 10 of the 11 major S&P sectors were in the red, led by the energy index’s 3.49 per cent fall.

Shares of oil majors Exxon and Chevron were down 5.6 per cent and 3.4 per cent, respectively, after reporting lower-than-expected quarterly profits.

Google-parent Alphabet fell 5.3 per cent after its profit also misses analysts’ estimates. Apple fell 2.9 per cent as investors focused on the company’s muted forecast rather than strong iPhone prices and its cash plans.

One bright spot was Amazon, which rose 5.4 per cent after the online retailer reported a record profit of about $2 billion due to strong sales and tax law changes.

– Additional reporting: Reuters/Bloomberg/PA

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