CRH and Smurfit lead rebound amid hopes debt crisis will ease
Published 15/09/2011 | 05:00
IRISH stocks gained, as companies such as CRH and Smurfit Kappa rebounded from recent lows amid optimism that the crisis in Europe may ease.
The ISEQ Overall Index advanced 49.8 points, or 2.1pc, to 2,467.51 points, led higher by industrials and companies which reported good news.
Smurfit Kappa soared 10.7pc to €4.78, while CRH jumped 5.3pc to €11.15 as they erased losses which piled up over the past few days as the European debt crisis worsened. CRH was raised to "outperform" from "neutral" by Davy analyst Barry Dixon earlier this week.
Recruitment company CPL jumped 10pc to €4.78 as it reported better-than-expected profits and announced it would return €20m to shareholders.
AIB jumped 5.3pc to 4c as executive chairman David Hodgkinson told a Dail committee he still hoped to persuade investors to back the lender in 2012.
Mr Hodgkinson said he would prefer a minority shareholder and the bank has drawn interest from "vulture" funds, as well as investors with a decade-long horizon.
Bank of Ireland was up 2.6pc at 8c as chief executive Richie Boucher told the same committee that "the market" expects the lender to return to profit in 2013 and the bank hasn't sought to provide other guidance.
IFG continued to fall, slipping 4.2pc to €1.15. Shares plunged 26pc the previous day after the Dublin-based financial services group said talks on a takeover bid with Bregal Capital concluded without a bid.
European stocks rose and fell during trading amid conflicting news about the debt crisis.
The benchmark Stoxx Europe 600 Index eventually closed up 1.5pc in London on optimism that China will help Italy as Austria delayed a parliamentary vote on an overhaul of the European bailout fund, causing confusion among investors.
"A Greek default is not going to ripple the same way and in the same magnitude that we saw in 2008," Paul Chew, head of investments at Brown Advisory in Baltimore, said yesterday.
"We got into the current situation in a much better state than in 2007. That makes us confident that any crisis in Greece is not going to snowball."
In London, Next jumped 6pc to the highest levels since the 1980s as the UK's second-largest clothing retailer reported a jump in first-half earnings and said next year might not be as challenging for the industry.
Debenhams, the UK's biggest department store retailer, rose 7pc. BP climbed 3.5pc after a US investigation said two American companies also violated offshore safety rules in connection with last year's Deepwater Horizon rig explosion that led to the Gulf of Mexico oil spill.
Sonova, Europe's biggest hearing aid maker, surged 14pc after receiving approval from the US Food and Drug Administration to resume sales of the HiRes 90K cochlear implant following a recall.
Carmakers had the biggest gain of 19 industry groups in the Stoxx 600, soaring 5.1pc as a group. BMW rose 5.7pc and Volkswagen rallied 5pc.