Global markets back in decline

DISAGREEMENT between Germany and France over the use of the European Central Bank (ECB) as a rescue lender to shore up the eurozone debt crisis; and a continuing rise in borrowing costs, sent international markets back into decline, yesterday.

While all national bond yields have gone up against the German yield — the regional benchmark — those of Spain and France were particularly high yesterday.

Although the interest rate on 10-year Spanish bonds nudged the 6.75% mark at one point, the country’s finance minister, Elena Salgado said Spain is at no risk of having to receive a bailout.

In Spain, the IBEX-35 Index was down by 0.4% but most notable European bourses were down by over 1%. In London, the FTSE-100 shed 1.56%, while in Paris the CAC-40 was down by nearly 1.8%. The DAX in Frankfurt was down by just over 1%.

The ISEQ in Dublin was also down — by 1.52%, or 41 points — following its brief rally on Wednesday.

Yesterday’s fall was aided by significant dips in the share prices of CRH, Grafton Group, FBD, Icon, Kingspan and Merrion Pharmaceuticals. Climbers were, predictably, rare, with only Aryzta, Paddy Power, Tullow Oil and Irish Continental Group (ICG) catching the eye.

While initially calmer, the US markets started falling in mid-afternoon — the Dow Jones, S&P-500 and Nasdaq down by between 1% and 2%.