Markets fall from five month high

Investors dumped stocks today, forcing a retreat from a five-month high on European equity markets, amid fears that the euro zone debt crisis will make it harder for sovereigns and banks to raise necessary capital this year.

National benchmark indexes fell in all of Europe’s 18 western markets, with only Iceland and Switzerland gaining.

A slide in bank shares prompted by a rights offer at UniCredit, Italy’s largest lender, weighed heavily on investor sentiment, while a disappointing Christmas sales update from Next, the UK’s second-largest clothing retailer, also proved a drag on the FTSE ahead of similar trading updates from other retailers.

The Iseq spent the day zig-zagging downwards, plunging at the close to finish the session down almost 1.8 per cent on the previous day.

It was a day when only market minnows managed to post a climb, in most cases on the back of tiny volumes.

There was no shortage of fallers among the major stocks. Pharmaceutical group Elan slid 5 per cent to €10.17, while there was a drop of 2.6 per cent to €3.68 for Ryanair and a 2.7 per cent fall to €2.01 for United Drug. Food group Greencore fell 3.1 per cent to 62 cent, drinks group C&C finished down 2.4 per cent at €2.81, while the banks also closed in the red.

Building materials giant CRH escaped relatively lightly with a 1.3 per cent decline to €15.48. The cement-maker issued a strategy update signalling that its total 2011 development spend would arrive at €600 million.

It added that 23 bolt-on acquisition and investment initiatives totalling €400 million were undertaken in the second half, meaning strategic spending by the company picked up as the year progressed.