Facebook fails to inspire US markets

FACEBOOK’S FLOTATION on Nasdaq may have been the main story in the US yesterday, but in Europe markets continued to be held hostage by ongoing euro zone volatility, as most markets closed down.

DUBLIN

ON THE Iseq, stocks fell in line with trends across Europe, apart from a few notable out-performers.

Overall the index closed down by 0.6 per cent at 3,014.26.

CRH was particularly strong, gaining 29 cent or 2.2 per cent to finish up at €13.74, on a quiet news day.

The market also responded well to a positive trading update from travel software firm Datalex, as it advanced by 3 cent, or 5.8 per cent, to climb to €0.55.

Paddy Power held on to its position as the star performer yesterday, adding 86 cent, or 1.8 per cent, to advance to € 49.36, as it prepares its launch in the Italian market.

Also in the market with an interim statement was Total Produce, which reaffirmed its guidance for 2012.

However, despite the update, the stock was down on the day, giving up 2 cent, or 5.2 per cent, to fall back to €0.44.

In its update, Independent News Media indicated that revenue to date this year was trailing 2011 trends, with both advertising and circulation revenue falling year on year. On the back of this, it gave up almost 1 cent, or 1.8 per cent, to finish the day down at €0.27.

Ahead of its numbers next week, Ryanair was weak, and it gave up 14 cent, or 3.4 per cent, to finish down at € 4.02.

Bank of Ireland shrugged off a downgrade from Deutsche Bank, and finished the day largely flat, down by 0.01 cent at €0.083.

LONDON

IN THE UK, stocks fell for a fifth day, the longest streak of losses since November, as commodities producers slid amid signs of slowing growth in China.

The benchmark FTSE 100 index dropped 70.76, or 1.3 per cent, to 5,267.62 at the close in London, extending this week’s retreat to 5.5 per cent.

The gauge has declined 12 per cent from its 2012 high on March 16th amid growing concern Greece will default on its debt, entering a so-called correction.

“Bulls will doubtless be glad to put this week behind them, having had to endure a wave of selling that has its origins in Europe,” Chris Beauchamp, a market analyst at IG Index in London, wrote in an email.

“Monday morning will probably find us in very much the same position in which we are now,” he added.

Commodity shares dropped after data yesterday showed that China’s home prices fell in a record number of cities last month and car dealers posted inventory levels that foreshadowed deeper price cuts, adding to signs of slowing growth in the world’s second-largest economy.

BHP Billiton fell 1.2 per cent to 1,704.5 pence and Rio Tinto retreated 2.4 per cent to 2,788 pence.

Banking shares also declined, with RBS retreating by 5.1 per cent to 19.99 pence and Lloyds Banking falling 6.2 per cent to 25.95 pence. The stocks are at the lowest levels of the year.

Barclays slid 3.2 per cent to 176.1 pence, for the biggest weekly drop since August.

EUROPE

EUROPEAN STOCKS also fell for a fifth day, posting their biggest weekly sell-off since September, amid signs of slowing growth in China and continued concern that Greece will have to leave the euro area.

The Stoxx Europe 600 Index slid 1.1 per cent to 238.88 at the close in London. The equity benchmark slumped 5.2 per cent this week and 7.2 per cent so far this month. That would be the largest monthly drop since last August.

“On a medium-term view, there is certainly valuation support for equities, particularly relative to government bonds, which have now hit quite remarkable levels,” said Bill Dinning, an investment strategist at Kames Capital in Edinburgh.

“However, that doesn’t help much in terms of timing. Obviously, we are back in a situation where the euro area is having an existential crisis,” he added.

National benchmark indexes retreated in 14 of the 17 western-European market that opened yesterday. Germany’s DAX slid 0.6 per cent, while France’s CAC 40 slipped 0.1 per cent.

US

FACEBOOK’S IPO breathed early life into US markets yesterday, as it made its debut at $38 on Nasdaq.

The heavily subscribed stock was up 11 per cent in early trading, as the online social network raised as much as $18.4 billion in one of the biggest initial public offerings in US history.

However, it fizzled thereafter, giving up its early gains to fall back close to its IPO level, ending up just 0.6 per cent

US markets had advanced on the back of optimism over Facebook but declined in afternoon trading. – (Additional reporting: Bloomberg/Reuters)