Finance Bill and US speech give shares a welcome boost
Published 27/01/2011 | 05:00
IRISH shares continued their strong run of recent days, as the passing of the second stage of the Finance Bill and strong sentiment from the United States buoyed markets.
By the end of trading in Dublin yesterday, the ISEQ Overall Index was up 0.68pc, or 19.78 points, at 2,929.72. That was the fourth consecutive positive day on the index, which has risen nearly 4pc since the opening last Friday.
Sentiment was strong from the opening bell, with the index charging as high as 2,940 at lunchtime before falling back slightly in the afternoon.
The airlines led the index, with Ryanair and Aer Lingus both having a strong day's trading. Ryanair jumped 3.09pc to €3.67 after the budget carrier said it will open extra routes out of Manchester while Aer Lingus added 1.38pc to €1.03 as traders backed chief executive Christoph Mueller in the dispute with cabin crew.
Positive sentiment from the State of the Union speech by President Barack Obama, which was roundly seen as a pro-business speech, helped prod American focused companies higher.
As well as benefiting CRH to the tune of 0.69pc -- the stock closed at €16.13 -- Mr Obama's comments were also seen as a reason for the Dow Jones Industrial Average pushing past 12,000 for the first time since 2008.
Losers were far out numbered but Bank of Ireland had a particularly bad day after a super tax on bankers' bonuses was reinstated to the Finance Bill. It finished 6.21pc lower at 32c. In contrast, Allied Irish Banks ended its first day on the smaller Enterprise Securities Market up 4.07pc at 26c.
Across Europe, stocks rose amid speculation that the Federal Reserve would continue to support the recovery even as growth in the world's largest economy accelerates.
National benchmark indexes rose in all the 18 western European markets except Luxembourg. France's CAC 40 gained 0.7pc, the UK's FTSE 100 increased 1pc and Germany's DAX added 0.9pc. The Stoxx Europe 600 Index rallied 0.9pc.
"We expect the [Fed] statement to acknowledge a general improvement in US economic data since the last meeting," said David Semmens, an economist at Standard Chartered Bank in New York.
"We anticipate they will complete the $600bn (€438bn) of Treasury bond purchases on account of a benign inflationary environment and high unemployment."
Porsche snapped a five-day decline, rising 7.1pc. HSBC upgraded the carmaker to "overweight", while the company said unit sales in China last year rose 63pc.
Renault advanced for a fourth day, rising 3.4pc. The French carmaker had its recommendation lifted to "overweight" at Barclays Capital. In London, Vodafone advanced 2pc. Verizon may make the first payment from its Verizon Wireless partnership since 2005, said CEO Lowell McAdam.