Business World

Saturday 25 March 2017

ISEQ down as bank shares decline

Thomas Molloy

Thomas Molloy

RENEWED worries about the future of the banks dragged the ISEQ Overall index down 23.09 points, or 0.7pc, to 3309.89 points yesterday.

Shares in Bank of Ireland (BoI) closed down 6.8pc at €1.64 after National Treasury Management Agency boss John Corrigan told reporters on foot of a Dail committee hearing that the recapitalisation of BoI would "probably" involve the conversion of some of the State's preference share investment into ordinary equity. Shares in Allied Irish Banks fell 4.3pc to €1.44.

McInerney Holdings plunged 8.5pc to 13c after the home builder published its annual report and new figures in Britain suggested the housing market was slowing. McInerney paid managing director Barry O'Connor €574,000 last year, the same amount as the previous year.

Petroceltic International swam against the current, jumping 9.4pc to 17c after Blackrock Investment Managers bought 1 million shares to raise its stake to 6pc.

Another gainer was Smurfit Kappa which rose 0.4pc to €6.80 after the papermaker's share price target was raised to €12 from €10 by Dublin- based Davy Research, which said it expected box price increases to more than offset a rise in raw materials.

Earnings

Stocks elsewhere in Europe dropped with national benchmark indexes declining in all of the 18 western European markets, except Spain. The UK's FTSE 100 and Germany's DAX each fell 0.3pc while France's CAC 40 lost 0.5pc.

The declines came as Alcoa kicked off the US earnings season with sales that missed analysts' estimates and falling oil prices weakened the earnings outlook for energy companies.

Alcoa, the biggest US aluminum producer and the first company in the Dow Jones Industrial Average to report first-quarter results, reported lower-than-estimated sales that show the recovery from the worst US recession since the 1930s was still not robust, investors and analysts said.

BHP Billiton, the world's biggest mining company, and oil giant Total fell as Alcoa's results called into question the strength of the economic recovery. Sweden's Sandvik slid 1.7pc as Credit Suisse and Morgan Stanley downgraded the world's largest maker of metal-cutting tools.

The Stoxx Europe 600 Index fell 0.3pc to 268.69, a second day of declines. "We are in a situation where the market is having a bit of a breather and investors want to see what companies will report," said Raimund Saxinger, a Frankfurt-based fund manager at Frankfurt Trust.

"Earnings growth will come down in the next quarters but it will still grow and markets should be aware of that."

Retail shares posted the biggest increase in the Stoxx 600, climbing 0.7pc.

Irish Independent

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