Construction heavyweight CRH drags market lower
An investor puts his feet up while checking a screen showing stock information at a brokerage house in Hefei, Anhui province yesterday.
Thursday August 27 2009
Despite a strong performance from the banks, the Dublin market closed lower after a sharp fall by CRH, as shares in the construction heavyweight suffered a downgrade in the wake of this week's results.
The fall in CRH, which makes up around a third of the ISEQ by weighting, was enough to drag the index lower at the close.
CRH shares fell over 5pc after Goodbody said growth was unlikely in 2010 given a lack of acquisitions; its large exposure to the non-residential sector in the US and its exposure to weaker residential markets in Europe. It also said the group had low exposure to emerging markets relative to its peer group and that it was changing its recommendation from "add" to "reduce".
Housebuilder McInerney was one of the best performers on the day. It climbed 14.71pc ahead of interim results due on Monday. The market's other housebuilder, Abbey, was up 1.85pc while on the materials side Kingspan rose a fraction or 0.32pc and Grafton fell 1.54pc.
Food stocks were also mixed, with Kerry falling a shade despite an upgrade to forecast profits and share price target by Goodbody. Glanbia delivered a reasonable first-half result given the state of global dairy markets but the stock was down 3.7pc at €2.60. Greencore was best, rising 4pc to €1.54.
Paddy Power was one of the best performers as it jumped 6pc despite a decline in operating profits.
Banks
The banks bounced on the back of a strong performance by financials in London and reasonable results from Irish Life & Permanent, which closed 2pc ahead. AIB was up 7.38pc and Bank of Ireland added 8.57pc.
In London, state-owned Royal Bank of Scotland (RBS) hit a nine-month high, but the wider London market paused for breath after its recent strong run. RBS raced ahead by more than 5pc thanks to an upgrade from broker Oriel Securities in the wake of its pension cost-saving moves.
But an otherwise quiet day for corporate news offered little direction for the FTSE 100 Index, which closed down 26.2 points at 4890.6.
Advertising giant WPP was one of the day's losers after cautious comments on the prospect of an upturn, while services group Serco lifted 6pc after a strong update.
The part-nationalised banks joined the risers amid a period of climbs for the state-backed institutions.
- Pat Boyle
