Big gains offset heavy bank losses
IRISH shares rose yesterday, as gains by three of the four biggest stocks on the index were enough to offset heavy losses in the financial sector.
By the close of trading the ISEQ Overall Index was up 0.45pc, or 13.29pc, at 2,969.57.
CRH, which is worth a quarter of the index, gained 1.92pc to reach €15.14. The construction giant spurred a wider buying spree in the sector, with Grafton Group (up 0.86pc) and Kingspan (up 4.45pc) both making ground.
The food sector had another good day, with Kerry adding 2.05pc to €29.80. Glanbia rose again, adding 1.20pc to close at €4.91. And pharmaceuticals company Elan claimed 2.98pc, closing at €6.85.
Those gains were enough to outweigh a bad day in the financial sector after a number of lenders announced plans to buy back subordinated debt at a substantial discount.
Bank of Ireland plunged 27.87pc to 13c after it said it would seek to impose losses of as much as 90pc on €2.6bn of subordinated debt as it offers bondholders an exchange for cash or equity.
Separately, Irish Life & Permanent said it hoped to buy back up to €840m of subordinated debt at a discount of 80pc on most securities. IL&P closed down 4.55pc at 11c.
Allied Irish Banks, which has already announced a debt buyback plan, finished the session off 3.16pc at 18c.
It was a tough day for the airlines, with Aer Lingus suffering after it was served notice of strike action by its pilots. The stock closed down 3.07pc at 79c. Ryanair also struggled, losing 2.76pc to reach €3.45.
Elsewhere, European stocks climbed after the euro rallied to a three-week high as investors speculated that European officials will sanction additional financial assistance for Greece.
National benchmark indexes advanced in all but three of the 18 western European markets. France's CAC 40 Index rose 1.6pc, Germany's DAX Index jumped 1.9pc, while the UK's FTSE 100 Index gained 0.7pc. The Stoxx Europe 600 rose 0.7pc.
"We have gone through a period in which a lot more pessimism surrounding this topic has come into the market and we are seeing something of a rebound off the back of that," said Valentijn Van Nieuwenhuijzen, head of strategy at ING Investment Management. "The likelihood of an explosion of the Greek situation over the next couple of months seems to have come down."
Nokia tumbled 18pc, its lowest price since 1998, after the Finnish mobile-phone maker forecast that devices and services net sales in 2011 will miss its previous projection.
Alpha Bank, Greece's third-biggest lender, rallied 8.6pc in Athens, while Eurobank, the country's second-largest bank, surged 11pc.