Irish shares bounce back after German court supports bailout
IRISH shares rose yesterday as the decision by a German court to support the eurozone bailouts boosted sentiment across the continent.
By the close of trading the ISEQ Overall Index was up 2.92pc, or 71.49 points, to close at 2,519.42.
The index surged from the opening bell and stayed up for the rest of the session as news of the ruling came through.
In an eagerly awaited judgment, the German constitutional court decided the bailouts of Greece, Ireland and Portugal did not infringe the budgetary authority of the German parliament -- but they did warn that further German contributions to the bailouts should be passed first by the Bundestag's budget committee.
Nevertheless, the approval of the bailouts was good enough for traders who waded gleefully into the markets again.
Equities were also boosted by speculation that US President Barack Obama would introduce a massive stimulus programme when he launches his jobs plan tonight.
Mr Obama's planned spending programme could include a number of infrastructure projects which would be a huge boost to CRH. Shares in the Irish construction giant responded accordingly, adding 5.31pc to close at €11.91.
Aer Lingus jumped 6.3pc to 68c after transport minister Leo Varadkar floated the possibility of the Government selling its stake in the carrier.
There was buying across a broad range of businesses.
Independent News & Media climbed 8.77pc to 31c while Dragon Oil added 6.61pc to €5.60. Few stocks ended the session in negative territory but there were a number of laggards on the day.
Clinical trials group Icon slumped nearly 10pc after company chief executive Peter Ryan said he would retire as chief executive to be replaced by current chief financial officer Ciaran Murray. The stock closed down 9.68pc at €14.
Donegal Creameries slumped 4.96pc to €3.45 as the group moved closer to selling its liquid milk business to Connacht Gold.
Elsewhere, European stocks rose the most in three weeks, rebounding from a two-year low, after three days of losses dragged the Stoxx Europe 600 Index near to the cheapest since 2008.
National benchmark indices gained in all 18 western European markets, except Iceland. Germany's DAX advanced 4.1pc and the UK's FTSE 100 increased 3.1pc, the biggest jumps since May 2010. France's CAC 40 rose 3.6pc. The Stoxx 600 rose 3.1pc.
"Valuations are attractive in the short term," said Guillaume Duchesne, an equity strategist at BNP Paribas. "Some stocks have been massacred so there are good entry points. Still, volatility remains significant and it's best to be cautious. Today looks like a technical rebound."