Business Irish

Wednesday 26 October 2016

Smurfit Kappa and US jobs data help markets to stay positive

Published 07/05/2016 | 02:30

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City. Photo: Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City. Photo: Reuters

IRISH shares were little changed yesterday, as strong results from Smurfit Kappa Group offset drops in the banks brought on by the prospect of more State interference in the financial sector.

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By the close in Dublin the ISEQ Overall Index had risen 0.67 points, or 0.01pc, to close at 6,038.90.

The market was buoyed by strong first-quarter numbers from paper and packaging giant Smurfit Kappa which were marginally ahead of expectations.

The stock gained 2.78pc to close at €23.69.

But Smurfit's gains were cancelled out by slides in the banking sector. The agreement for the new Government includes proposals for the State to maintain its holdings in the banks for much longer than had been expected as the State looks at ways to force down interest rates and protect homeowners from eviction.

The Government may also delay its initial public offering of AIB, which had been widely expected for this summer.

Permanent TSB slumped 4.9pc, while Bank of Ireland slid 1.24pc - its fifth straight decline.

AIB ended the session unchanged.

Around Europe, major indices recovered from a weak start to the day after poor jobs numbers from the US made it less likely that the Federal Reserve there will increase interest rates in the near term.

The Stoxx Europe 600 Index fell 0.4pc. The FTSE 100 in London gained 0.1pc, while Frankfurt's Dax Index added 0.2pc. The CAC 40 in Paris lost 0.4pc. "We're almost back to that Goldilocks scenario where the growth isn't so hot that you have to put rates up dramatically and also not so weak that you have to add a lot of stimulus," said Patrick Spencer, equities vice chairman at Robert W Baird in London.

"We've had a hell of a run since February, so it's hardly surprising we're getting a bit of profit taking now. Concerns about global growth are coming back."

Irish Independent

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