Greek default fears hit ISEQ
Published 03/06/2011 | 05:00
Irish shares fell slightly yesterday, as concerns about the Greek crisis took centre stage again. The ISEQ Overall Index closed down 0.26pc, or 7.64 points, at 2,963.66.
The index slumped from the off and stayed down for the rest of the day after Greece's risk of default was raised to 50pc by Moody's as European officials rushed to put together the second bailout plan in two years to stave off renewed financial turmoil in the region.
Moody's downgraded Greece to Caa1 from B1, putting it on a par with Cuba. The move came after policy makers considered asking investors to reinvest in new Greek debt when existing bonds mature.
That news led to relatively broad-based losses across the index.
CRH fell 1.48pc to €14.67, while other construction stocks such as Grafton fell back as well. Grafton Group dropped 1.85pc to close at €3.45.
The food sector had a rare bad day, with Glanbia closing down 0.94pc at €4.97. Kerry Group missed out on the €30 mark, instead falling 1.13pc to finish at €29.65.
On the other side of the board, Aer Lingus rose 4.53pc to 81c, amid reports that the airline may avoid strike action by their pilots.
Bank of Ireland continued to gain after heavy losses earlier in the week, leading the index in percentage terms, up 16.20pc at 17c.
Most indices around Europe fell. The UK's FTSE 100 Index lost 1.3pc, Germany's DAX Index slid 1.8pc and France's CAC 40 Index declined 1.7pc. Markets in Switzerland, Austria, Luxembourg and the Nordic region were closed yesterday for the Ascension Day holiday. The Stoxx Europe 600 fell 1.2pc.
"The recent pattern of poor economic data is beginning to fuel speculation that the global recovery has lost momentum and could start going into reverse," said Jonathan Sudaria, a trader at London Capital. This is "causing traders to flee risky assets".
In London, Kingfisher lost 1pc after the retailer reported earnings that missed analysts' estimates as profitability declined at its UK B&Q chain.
Gross margin, or profit as a percentage of revenue, was "slightly down" in the UK and Ireland as less-profitable seasonal items and increased promotions drove sales growth.
Home Retail Group fell 2.2pc, while Wolseley, which supplies heating and plumbing products, declined 3.1pc.
Noventa plunged 61pc, after the tantalum miner warned of an "urgent fundraising requirement."
Base metals fell for a second day on the London Metal Exchange as the outlook for global growth dimmed. Reports showed manufacturing output weakened across the globe.