Shares tread water and euro falls on Greek fears
Published 21/05/2015 | 02:30
The ISEQ was little changed yesterday afternoon after skirting close to highs the previous day.
The biggest gainer was Independent News & Media which was up almost 6pc in afternoon trading following a bullish trading statement the previous day. The shares advanced as more than 20 million traded hands. Other gainers included C&C which rose 1.8pc as rival Britvic reported a good first half but FBD continued its decline, slipping 2.6pc to €9.25 following disappointing trading update. Ryanair dropped 1.5pc to €10.80.
Elsewhere in Europe, the euro slid to a two-week low and a rally in European shares stalled after a Greek official said the country may not make an upcoming repayment to the International Monetary Fund.
The euro's fall also followed remarks from a European Central Bank board member on Tuesday that the central bank could increase the pace of its bond-buying in May and June, bringing its losses against the dollar this week to as much as 3pc.
"With Greek government liquidity particularly tight and reports suggesting the IMF payment on June 5 is under question, then we expect further turmoil ahead before any deal is ultimately reached," Royal Bank of Scotland rates strategists said in a note yesterday.
The euro fell as low as $1.1065 early yesterday, off almost three cents since ECB Executive Board member Benoit Coeure said this week that the bank may "moderately" increase its bond-buying programme in May and June.
The Greek government's parliamentary speaker said yesterday that Athens will not make a payment to the IMF that falls due on June 5 unless it has reached a deal with its creditors by then.
Euro zone government bond yields were also lower, widening the gap between benchmark US and German yields further in favour of the dollar.
European shares were unable to draw support from the weaker currency and lower yields, and mirrored the sticky performance of Asian bourses. The best news was seen in telecommunication shares and banks.
Altice jumped 11pc on deals activity, while Vodafone rose 4.7pc after Liberty chairman John Malone said a tie-up with the UK phone company would be a "great fit" for his cable empire.
UBS gained 3.3pc and Barclays advanced 3pc after agreeing to pay fines to settle probes into interest-rate rigging.
Investors were also watching developments in Greece yesterday. The ASE Index dropped 0.7pc after closing at its highest level since March 6 as ECB policy makers discussed aid for the nation's banks.
Deutsche Wohnen slipped after the residential landlord posted a quarterly loss. Burberry slid 5.5pc as it reported a decline in annual earnings. Marks and Spencer shares rose after it returned to profit.