ISEQ soars as central banks act to halt crisis
IRISH shares rocketed yesterday as the news that the world's central banks would launch coordinated action to support the banking system boosted sentiment.
By the close of trading the ISEQ Overall Index had recorded its biggest daily gain in percentage terms since December 2008. The index closed up 4.78pc, or 125.33 points, at 2,749.05.
The index actually opened lower and bumped along at a daily loss for the morning, but once news broke that six central banks led by the US Federal reserve would lower the cost of emergency funding in an effort to stop the European crisis, the market took off.
Allied Irish Banks had a particularly strong day, after it said it was half-way to its target of reducing its loan portfolio by 2013. The lender added 8.33pc.
Likewise, Bank of Ireland had a good session, finishing 6.9pc higher. The food sector was a particularly popular division of the market yesterday, after a measure of the industry was shown to have grown by more than 80pc over the last five years.
Glanbia recovered earlier losses to reach €4.65 to post a gain of 6.9pc while Kerry Group climbed 5.14pc to €27.80.
Speciality baker Aryzta continued to gain, closing up 3.73pc at €34.91 while Greencore rose 2.78pc to 74c.
Elsewhere, European stocks posted their biggest four-day rally since November 2008, as central banks took action and China cut its reserve ratio for banks.
National benchmark equity indices advanced in every western-European market except Iceland. The UK's FTSE 100 Index increased 3.2pc, France's CAC 40 Index jumped 4.2pc and Germany's DAX Index surged 5pc. The Stoxx Europe 600 Index increased 3.6pc.
"You have central banks acting in a coordinated manner," said Henrik Drusebjerg, a senior strategist at Nordea Bank in Copenhagen.
"You had China moving today too and you have the hope that European politicians will use their next meeting to get in front of the problem instead of being behind."
A gauge of European banks, which had earlier declined on S&P rating cuts, jumped 4.4pc. Barclays surged 6.7pc. Deutsche Bank, Germany's biggest bank, soared 6.2pc. Lloyds jumped 7.1pc.
Miner BHP advanced 6.2pc while Rio Tinto, the world's second-biggest mining company, climbed 6.4pc. Xstrata jumped 6.5pc. A gauge of mining shares rose 6pc for the best performance in the Stoxx 600.