Irish stocks reach five-month peak as Fed pledges low rates
Published 18/03/2010 | 05:00
IRISH stocks jumped to a five-month high as shares elsewhere in Europe soared to a 17-month peak following the Federal Reserve's pledge to maintain record-low borrowing costs for an extended period to safeguard the economic recovery.
The ISEQ benchmark closed up 77.71 points, or 2.6pc, at 3122.68 points as banks jumped. National benchmark indexes rose in all 18 western European markets, except Greece. Turnover was a little lower than usual because of the St Patrick's Day holiday, with almost all trading taking place among the benchmark's largest shares.
Allied Irish Banks rose 8.8pc to €1.59, while Bank of Ireland jumped 7.7pc to €1.33 on hopes that Finance Minister Brian Lenihan and the National Asset Management Agency will clear up unanswered questions about the future of the banking sector by the end of the month.
Food company Aryzta rose 1.9pc to €29.29 after it was raised to overweight by Swiss brokerage ZKB.
Drinks group C&C inched up 0.4pc to €2.89 after its American Depositary Receipts were listed on OTCQX exchange to encourage US investors to follow the company. Aminex, which jumped 16pc to 16c after reporting drilling at the Olympia Minerals-1 well at Shoats Creek, Louisiana, has revealed several potential oil-and gas-bearing intervals in cockfield sands.
In Europe, the Stoxx Europe 600 Index climbed to a 17-month high with the UK's FTSE 100 jumping to a 20-month peak. Rio Tinto Group led mining shares higher after the Fed said on Tuesday that while the economy was improving, interest rates would remain low.
UniCredit gained the most in 10 months after Italy's biggest bank posted earnings that beat estimates. Arriva jumped the most in 10 years after reports that the UK rail operator received a takeover approach.
"The Fed's comments indicating monetary policy will stay as accommodative as it is needs to be and for as long as it needs to be is good for sentiment," said Stephen Pope, equity strategist for Cantor Fitzgerald. "There are a number of feel-good factors coming to the fore."
Inditex climbed 3.5pc to its highest close since December 2007. The world's biggest clothing retailer posted an 18pc increase in fourth-quarter net income to €483m as foreign sales helped offset sluggish Spanish consumer spending.
Ericsson dropped 3.1pc after Merrill Lynch Global Research downgraded the world's largest maker of wireless phone networks to "underperform" from "neutral." Separately, Goldman Sachs removed the shares from its "conviction buy" list.
The National Bank of Greece, the nation's biggest lender, dropped 2.9pc as the finance ministry said Greek banks which participated in a €28bn government liquidity support plan wouldn't be allowed to pay a cash dividend on 2009 earnings.
US stocks rose, with the Dow hitting a recovery high as the Fed's rate promise was underscored by a benign inflation reading.