Business World

Monday 1 September 2014

ISEQ buoyed by low interest rate

Thomas Molloy

Published 11/01/2013 | 05:00

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Traders work on the floor of the New York Stock Exchange. Photo: Reuters

IRISH shares stayed close to four-year highs as the European Central Bank kept the benchmark interest rate at a record low.

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The ISEQ closed down 4.26 points at 3,499.97 points in Dublin last night as declines in oil companies such as Petroceltic International and Providence Resources balanced gains in CPL Resources and Grafton.

Petroceltic and Providence both closed down 3pc as oil prices remain subdued due to expectations that more oil worldwide will mean lower prices.

Recruitment company CPL Resources advanced 9pc to €4.05 as the economy continues to show signs of recovery.

Woodies owner Grafton Group extended Wednesday's surge, tacking on 1.7pc to close at €4.30 after saying it expects to declare profits of at least €70m when it publishes its 2012 results in March.

Elsewhere in Europe, national benchmark indexes rose in 10 of the 18 western European markets. The UK's FTSE 100 was little changed. France's CAC 40 retreated 0.4pc and Germany's DAX declined 0.2pc.

The euro rose the most in four months versus the dollar as ECB boss Mario Draghi said the economy should gradually recover. That left the currency at the highest level since July 2011.

The Stoxx Europe 600 Index retreated 0.3pc to 287.44 at the close of trading. The gauge last week surged 3.3pc after US politicians agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts.

In Paris, Financiere Richemont, the world's biggest luxury jewellery maker, fell 2.1pc after rival Tiffany said full-year earnings will be at the lower end of its forecast. Sanofi lost 0.7pc after US regulators cut the recommended dosage of some drugs including those sold by the French company. Nokia surged 11pc after saying its handset business probably saw a profit in the fourth quarter.

"We've seen a slightly less accommodating ECB in terms of movement on rates," said Michael Hewson, a market analyst at CMC Markets in London.

"That caution has been tempered by concerns about the economic outlook. Markets are at multi-month highs. Given how skittish investors are, it wouldn't take much to trigger a small sell-off."

Tesco gained 1.8pc after the UK's biggest grocer reported the strongest sales growth since 2010 as money-off coupons and an enhanced food offering helped spark a revival. ARM, whose chip designs power Apple's iPhones, added 4.4pc after Dialog Semiconductor reported a 56pc increase in fourth-quarter revenue to $268m.

MAN gained 3.5pc as Volkswagen plans to buy out the rest of the truckmaker's shareholders to take full control of the company.

Irish Independent

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