Food merger helps ISEQ add 1.5pc while markets await bailout news
Published 18/11/2010 | 05:00
IT was another day of "wait-and-see" for the market yesterday as a bailout appeared to move a step closer, reassuring markets across Europe, while a merger in the food industry buoyed the ISEQ.
Finance Minister Brian Lenihan admitted that an aid package may become necessary, while Britain's Chancellor George Osborne said the UK was ready to "help" if asked.
On the day, the ISEQ Overall Index closed up 1.51pc, or 40.09 points, to reach 2691.89.
The index saw gains across the board but was driven by the banks and Greencore, which soared nearly 30pc after the company announced plans to merge with a UK company to create Essenta Foods. By the close, Greencore was up 28.67pc at €1.34.
Financials were also winners on the day, as the apparent movement towards a bailout suggested that the banks may be further recapitalised as they remain at the root of the country's economic problems.
Allied Irish Banks rose 1.27pc to 40c, Bank of Ireland gained 2.30pc to reach 40c and Irish Life & Permanent rose 5.01pc.
Providence Resources continued its good form, adding 7.94pc to finish at €3.40 a day after the company said new interpretations of old data suggested that a field off the west coast could be twice as valuable as the infamous Corrib field.
It was a day when few stocks ended in the red. Packaging company Smurfit Kappa was one of the few, losing 1.64pc to close at €7.44 while the conglomerate DCC slipped 0.63pc to close at €20.31. The positive sentiment that came with an expected bailout had a positive effect across Europe.
National benchmark indexes advanced in 16 of the 18 western European markets. France's CAC 40 gained 0.8pc and Germany's DAX increased 0.6pc. The UK's FTSE 100 rose 0.2pc.
"Ireland is going to hold out for as long as they can and this is going to lead to significant volatility," said Nick Firoozye, London-based head of interest rate strategy at Nomura International.
"No one really trusts the banking sector numbers, which is why Ireland and Germany are centring on the idea that could bailout the banks."
GlaxoSmithKline climbed 2.4pc after the UK drug-maker and Human Genome Sciences won a US panel's backing to sell the first new lupus drug, Benlysta, in more than 50 years.
Deutsche Post gained 1.4pc amid reports that United Parcel Service (UPS) is seeking cooperation partners in Europe in a bid to expand its private-client business.
UPS, the world's largest package-delivery firm, has apparently established contact with Deutsche Post among others.