Monday 5 December 2016

Stock move higher despite poor prognosis, as US data gives boost

Reuters

Published 09/07/2016 | 02:30

Traders from BGC, a global brokerage company in London's Canary Wharf financial centre react as European stock markets open early. Photo: Reuters
Traders from BGC, a global brokerage company in London's Canary Wharf financial centre react as European stock markets open early. Photo: Reuters

European stock markets rallied yesterday despite a continuing downbeat prognosis for the UK and the Eurozone as a result of the British decision to leave the EU.

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The IMF said that Brexit will cause the pace of growth to slow to 1.4pc next year in the Eurozone from 1.6pc this year.

But strong jobs data from the US yesterday helped to underpin stocks.

The Bank of England will meet next week to discuss the Brexit threat, which saw consumer confidence in the UK slump at its fastest rate in 22 years, according to data published yesterday.

The Bank of England is likely to move to bolster the UK economy, but most economists expect it will wait until August, when it will have a better idea of the economic impact since the historic vote.

"A plunge in consumer confidence and evidence of markedly reduced business sentiment has enhanced the case for interest rates to be cut as soon as Thursday," said Howard Archer, the chief UK & European economist at IHS Global Insight. Ireland's ISEQ Overall Index rose in tandem with other European bourses.

It finished the session almost 1.6pc higher at 5,580.42.

Stocks on the move included Bank of Ireland, which rose 4.8pc to close at 17 cent. But it's still languishing more than 40pc lower than it was before the referendum.

Ryanair dipped, entering the weekend at €11.22. CRH gained 2.6pc to €25.32, while hotel group Dalata was 3.9pc higher at €3.73. In the UK, Woodies owner Grafton Group was 3.9pc higher at £4.89.

The UK's FTSE-100 closed just under 1pc higher, while Germany's DAX was up 2.2pc. France's CAC-40 moved 1.7pc higher.

The FTSE-100 has banished the declines seen following the Brexit vote and is now trading at a one-year high.

Irish Independent

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