Volatile US trading after Fed rate cut
That triggered losses in the US and Europe after Tuesday’s strong gains, with all key markets marginally down. The ISEQ 100 Index fell victim to New York’s sell off and ended the day down 0.85%.
CRH fell almost 3.5% to €23.90, as the threat of recession in Ireland and the US continues to undermine the shares. Grafton, with exposure to the British and Irish construction markets was a casualty, also as its share price fell under 1% to €5.35 while house builder McInerney also active in Ireland and Britain saw its stock fall 3.36% on the day.
There were casualties outside the construction sector also as IN&M, the Tony O’Reilly controlled media group, shed nearly 6% of its value as the shares continued to head lower. Another O’Reilly backed group, Waterford Wedgwood, has seen its market value virtually wiped out, as the sell-off of Irish shares, that began in mid-2007, continues to undermine the market.
Anglo Irish Bank which failed to gain on Tuesday’s rally stayed unchanged yesterday while the other major banks all gained on the day.
Share values in Ireland are off about €40 billion since foreign fund mangers started to sell the banking and construction sectors aggressively from mid-2007.
The FTSE 100 closed down just over 1% after regaining some of its midday losses, with mining stocks the most prominent losers.
The blue chip index closed down 1.07% or 60.2 points at 5,545.60 while the FTSE 250 shed just over 0.5% to close down 50 points at 9,551.20.
Five of the top seven blue chip fallers were miners, as the sector came under further pressure from falling commodity prices after recent record highs.
With further Fed cuts on the cards, some US investors are hoping the worst is over and stock values will start to recover in the coming months. Expectations of further cuts by the Fed could help halt the slide, analysts said. Since September 2007 the Fed has slashed rates from 5.25% to 2.25% in an effort by the central bank to prevent the US from a long recession.
Renowned global investor Jim Rogers said US stocks, which surged the most in five years on Tuesday after the Fed rate cut, were likely to continue their rally this year because the “out of control’ Federal Reserve was cutting rates to save investment banks from collapse.
