Dragon soars as 3,000 mark broken
Published 05/07/2011 | 05:00
There were few major fireworks on European stock markets yesterday as the US celebrated Independence Day with markets there closed.
News related to Greece once again drove much of the momentum this side of the Atlantic, as the EU approved the payment of its share of the next tranche of aid for the stricken country.
Some analysts are again suggesting that now is the time to buy European stocks, with many prices out of kilter with prospects.
"We think the pricing of risk within the European stock market is at odds with current fundamentals," said Ian Scott, a global equity strategist at Nomura Holdings in London.
"With the reduction in sovereign risks following the pivotal votes recently in Greece and the deal under discussion to roll over Greek bank debt, embedded risk premiums ought to come down."
Deutsche Bank upgraded its "tactical view" on equities and Nomura increased its recommendation to 'overweight' from 'neutral'.
The ISEQ Overall Index ended the session slightly deflated from earlier intraday highs, but still finished up a marginal 0.71pc, or 21.36 points, at 3,015.54, breaking the all-important 3,000 psychological barrier.
Stocks on the move included Dragon Oil, which soared 8.2pc, or 46 cent, to €6.06, valuing the company at €3.1bn.
The stock jumped after reports that a Chinese firm might make a bid for Dragon at between £7 (€7.75) and £7.50 a share. In London, Dragon climbed 8.4pc to £5.50.
Insulation maker Kingspan added 3.7pc, or 26.3 cent, to €7.36 -- its highest close since March -- while Independent News & Media gained 7.2pc, or 3.5 cent, to 52 cent.
Losers included building materials group CRH, which declined nearly 1.6pc, or 24.5 cent, to €15.39. It recovered some of those losses in after-hours trading, however.
National benchmark indices climbed in 13 of the 18 western European markets. The UK's FTSE 100 rose 0.5pc, Germany's DAX gained 0.3pc and France's CAC 40 slipped 0.1pc.
Societe Generale led banks lower as a gauge of lenders declined for the first time in five days. Societe Generale shed 1.3pc to €41.87, Italy's UniCredit slipped 1.4pc to €1.52 and Spain's Banco Bilbao Vizcaya Argentaria retreated 0.9pc to €8.27.
Ratings agency Standard & Poor's said a rollover plan serving as the basis for talks between investors in Greek bonds and governments would qualify as a distressed exchange and prompt a "selective default" rating.
That may leave the ECB unable to accept Greek government debt as collateral, blocking the lifeline the central bank has provided to the country's lenders.