Dublin stumbles amid fears over bank guarantee
Published 23/10/2010 | 05:00
IRISH shares slipped back yesterday, handing back some of the gains they had recorded earlier in the week amid speculation that the bank guarantee may be extended.
For the day, the ISEQ Overall Index lost 1.12pc, or 30.66 points, to close at 2,717.64. Despite the loss, the index still posted a solid gain on the week, having opened on Monday at 2,682.36. The major stocks led the index down, with CRH and the banks all slipping back after profitable weeks.
The building giant fell 2.71pc to €12.55, handing back part of the 8pc gain it recorded on Thursday, as traders cashed out some of their positions and took their profits. The stock was not helped by speculation that further attempts by the US government to stimulate their economy would not be as sustained as had been speculated.
The banks all stumbled after press reports indicated that the government may have to extend the bank guarantee beyond the end of the year to ease lenders' access to funding. That news apparently sent some dealers to the exits, with the three main banks all falling. Bank of Ireland fell 1.95pc to 60c while Irish Life & Permanent slid 3.33pc to €1.60. Allied Irish Banks dropped another 1.27pc to 39c.
Few stocks ended the day in positive territory but commodities and some food stocks shone. Origin Enterprises climbed 2.98pc to €3.14 while Kerry Group rose 0.81pc to €26.20. Oil and gas explorer Providence Resources jumped 4.98pc to €2.09 while Tullow Oil rebounded to close up 1.01pc at €13.91.
Around Europe it was a mostly negative day, with national benchmark indexes falling in 13 of the 18 Western European markets. The UK's FTSE 100 Index and France's CAC 40 Index both lost 0.3pc. Germany's DAX Index shed 0.1pc.
"The anticipation of quantitative easing has sparked a festive mood in the financial markets," said William de Vijlder, the chief investment officer at Fortis Investment Management in Brussels. "However, it should be borne in mind that quantitative easing is a sign of economic weakness that calls for exceptional measures whose effectiveness is not proven. For that reason, we remain cautious."
In London, Betfair surged 19pc on its first day of trading after the internet gaming site raised £221m (€250m) in its initial public offering. Camera equipment maker Vitec jumped 7pc after the company said business since its first-half results had been stronger than expected.