European stocks slide after Janet Yellen valuation remarks

European stocks fell for a second day, extending declines as the euro strengthened and Federal Reserve chair Janet Yellen said equity market valuations are “generally quite high”.

Ms Yellen qualified the remark by describing the risks to financial stability as “moderated, not elevated” and said she did not see any bubbles forming.

Markets were nevertheless choppy as the stand-off between Greece and its lenders continued and there was disappointing data on private US jobs growth.

Meanwhile, a global rout in government bonds deepened, with long-term US and European borrowing costs reaching their highest level this year, while oil prices hit their highs for the year in light shrinking US inventory and conflict in the Middle East.

DUBLIN

The Iseq index declined 1 per cent, as stocks including

Ryanair

and

Smurfit Kappa

fell. Building materials group

CRH

put out a positive interim management statement, but its shares were in negative territory for most of the day, with one Dublin trader noting that investors had indeed been expecting the statement to be good. It recovered later, finishing down just 1 per cent at €25.01.

Ryanair fell 2.8 per cent to €10.82 as prices in the volatile oil market rose, while paper and packaging group Smurfit Kappa fell 4.8 per cent to €26.07 as a seller in the stock pushed it down late in the session. The stock has recently been unwinding earlier gains.

On its second official trading day, there were sellers around in Permanent TSB, and it closed down at the issue price of €4.50.

LONDON

UK stocks were little changed, with the FTSE 100 edging slightly higher as investors showed no nerves ahead of Thursday’s election. The FTSE 100 Index added less than 0.1 per cent at the close, as a drop for supermarket chain

Sainsbury’s

offset advances in

Vodafone

and

Imperial Tobacco Group.

Sainsbury's dropped 3.2 per cent after posting the first profit decline in a decade, while Vodafone increased 1.6 per cent after analysts Exane BNP Paribas upgraded the shares.

Imperial Tobacco climbed 1.8 per cent after reporting an increase in first-half profit. Pharmaceutical group GlaxoSmithKline added 0.9 per cent.

Software company Sage was the top gainer, up 8 per cent, after posting organic revenue of £682 million pounds, in line with its 6 per cent growth target for the year.

EUROPE

European shares slid, as investors watched developments in the Greek debt talks. In Athens, the ASE Index added 2.9 per cent, after earlier losing as much as 1.8 per cent.

The Swiss Market Index plunged 1.5 per cent for the worst performance among western-European markets. Healthcare shares were the biggest drag on the Stoxx 600, with Novartis and Roche Holding declining at least 1.5 per cent.

Among stocks moving after corporate earnings, Société Générale fell 2.3 per cent as it posted declining revenue from trading bonds and a loss in Russia. Allianz gained 2.4 per cent after its first-quarter earnings rose 11 per cent. Anheuser-Busch InBev climbed 1.1 per cent. US Wall Street fell, following the steepest decline for equities in more than a month, as weaker-than-estimated data added to concerns about slowing growth before Friday's government jobs report. Companies added 169,000 workers to payrolls in April, new figures showed. The number was below a median forecast which predicted an advance of 200,000.

Micron Technology and Microsoft dropped for a third session, weighing on technology shares. Alexion Pharmaceuticals tumbled 10 per cent after agreeing to buy Synageva BioPharma for $8.4 billion, and Pfizer slipped as healthcare stocks slumped.

(Additional reporting: Bloomberg/Reuters)