Shares rise as banking stocks shrug off downgrades
IRISH shares rose yesterday as Ireland joined the rest of the continent by ending the week on a positive note.
On the day, the ISEQ Overall Index rose 1.19pc, or 34.95 points, to finish the week's trading at 2,972.07. However, the index still closed in the red for the week, having opened on Monday at 2,985.84.
The big gainers were the banks who all finished strongly despite being downgraded by one of the main ratings agencies.
Moody's cut its rating on most Irish banks' senior debt following comments by Finance Minister Brian Lenihan earlier in the week, but that was outweighed by data from the Central Bank which showed the level of funding given to the banks by the European Central Bank last month fell slightly.
That news was enough for traders to move back into the financials, with AIB rising 4.07pc to 28c and Bank of Ireland surging 6.8pc to 38c. Irish Life & Permanent gained 4.3pc to close at 97c.
There were strong gains across the index. The airlines in particular quickly recovered their losses from Thursday. Aer Lingus added 1.67pc to reach €1.04 and Ryanair posted a 0.58pc gain to close at €3.63. There were few negatives on the day, but those that did fall tended to be more illiquid stocks susceptible to volume variations.
Providence Resources slipped 1.75pc to €2.80, while fellow oil and gas explorer Aminex fell slightly to 12c.
Away from Ireland, stocks rose as Egyptian President Hosni Mubarak resigned and consumer confidence in the US rose in February, showing the recovery in the world's largest economy is strengthening.
National benchmark indexes climbed in 12 of the 18 western European markets. The UK's FTSE 100 Index increased 0.7pc and Germany's DAX Index added 0.4pc, while France's CAC 40 Index rose 0.2pc. The Stoxx Europe 600 gained 0.4pc.
"The announcement of Mubarak's resignation is good news," said Markus Huber, the head of German sales trading at ETX Capital in London. "It has removed some of the uncertainty in the region."
In London, Guinness Peat Group surged 8.7pc, the biggest gain since June. The owner of the world's largest thread maker is planning to sell most of its investments and return the proceeds to shareholders.
Ocado plunged 11pc, the biggest drop since its initial share sale last July, after John Lewis's pension plan sold its entire stake in the company for 265p a share.