Irish heavyweights skip global sell-off

By Eamon Quinn

Business editor

Some of the Irish stock market heavyweights swerved the global shares rout as US stock prices steadied following their precipitous Wall Street slide on Monday.

Heavyweights such as AIB and Ryanair — which had been sold off in recent weeks — avoided further selling pressure to post gains at the close of 3.6% and 2.3%, respectively.

Though Kerry Group by 2.3%, Ireland’s other big stock market giants, such as Bank of Ireland and CRH ended unchanged on the day. That helped the Iseq Overall index to hold its overall losses to 1.4% in the session. The Iseq Financial index only lost 0.5% of its value.

However, there were numerous sharp declines for smaller sized companies.

Financial software firm First Derivatives and travel software maker Datalex fell 9% and 3%, respectively, while bookings engine Hostelworld lost 4.5% of its value. Among other sharp falls, cider firm C&C dropped 4% and bookie Paddy Power fell 2%.

London’s FTSE-100 fared less well. It suffered its biggest drop since the Brexit vote in June 2016, as investors rushed out of equities. The index closed down 2.6% at 7,141.4 points at the end of a chaotic day of trading which drove volatility sharply higher.

“There’s a sense of relief that we finally have a meaningful correction; it’s long overdue. We have been positioned for it for a while, so we can actually breathe again,” said Christopher Peel, chief investment officer at Tavistock Wealth.

“This type of price action, where you have a correction as severe as it has been, is a great reminder to investors, traders, and regulators that it’s not all a one-way bet,” he said.

Volatility surged across the European market, with the gauge of volatility across leading European shares posting its biggest one-day gain ever.

In London, the stars of the past months’ rally were the worst fallers. Financials led the slide: HSBC, Prudential, Lloyds, and Barclays tumbled 2.5% to 4%.

Asset managers also featured prominently among the worst-performing stocks as the global markets “melt-up” reversed, pummelling investors’ portfolios.

Investment trust Scottish Mortgage tumbled 5% as the sell-off in US tech stocks took its toll on the fund, whose top holdings include Amazon and Tesla.

Asset managers Standard Life Aberdeen and Schroders, and retail investment platform Hargreaves Lansdown dropped 4.4% to 5.1%, among top fallers.

An outlier was outsourcer Capita whose shares jumped 13%, with traders saying the stock was still feeling the benefit of fund manager Neil Woodford’s positive comments.

Additional reporting Reuters