ISEQ advances 1.7pc in thin trading
THE Irish stock exchange saw very thin volumes yesterday as a bank holiday in the UK kept many investors at home and Wall Street recovered from Hurricane Irene.
The benchmark ISEQ Overall index rose 41.57 points, or 1.7pc, to close at 2,471.51 points. Turnover was just €33.2m or about a third of the usual amount.
Among the very few stocks to post any sort of significant movements were Paddy Power and Ovoca Gold, which both rose more than 5pc, DCC and Glanbia which both rose 2pc on the back of recent good news along with Grafton and Greencore, which advanced 3pc. IFG and Independent News & Media edged up more than 1pc on the back of takeover hopes and better-than-expected earnings respectively.
There was more action elsewhere in the world as global stocks rallied along with oil after a merger between two major banks in Greece gave investors a rare bit of encouraging news out of Europe.
The Stoxx Europe 600 Index halted two days of losses, with just 11 stocks declining. Munich Re and Swiss Re, the world's biggest reinsurers, both gained more than 4pc.
Greece's stock market jumped 14pc and Greek bank stocks surged 29pc following news of the merger between Eurobank and Alpha Bank, the second- and third-largest banks in Greece.
"We've actually started putting cash to work," said Keith Wirtz, chief investment officer at Fifth Third Asset Management. "A few things (are) helping the stock market -- there's relief coming from the storm and Europe, particularly with Greece."
The tie-up between Eurobank and Alpha Bank created the largest bank in southeast Europe and could trigger more such deals, analysts said. "It will be the starting signal for M&A in Greece," said one analyst.
Surprisingly strong US consumer spending for July -- which indicated the economy was not falling back into recession -- further boosted sentiment.
US crude oil rose 2.4pc, trading above $87 per barrel and extending gains from Friday on the possibility of fresh stimuli for the US economy.
Spot gold fell 2.2pc to below $1,790 an ounce as investors moved away from safe havens to embrace riskier assets like oil.
The S&P 500 Insurance Index of 22 stocks rallied 4.2pc as Hurricane Irene's estimated cost declined with the storm losing strength en route to New York. Hartford Financial Services Group added 12pc, while Travelers increased 4.4pc.
Bank of America gained 5.8pc, the most in the Dow Jones Industrial Average. The bank will sell 13.1 billion shares in a private transaction with a group of investors.