Monday 24 July 2017

ISEQ static as soaring airline shares offset by bank losses

An Iranian official works at her desk in the main hall of the Tehran Stock Exchange yesterday
An Iranian official works at her desk in the main hall of the Tehran Stock Exchange yesterday
Thomas Molloy

Thomas Molloy

IRISH shares were little changed as declines in Allied Irish Banks and other lenders offset gains in the airlines and Glanbia, which hit a 52-week high.

The ISEQ closed up 1.48 points at 2,963.34 as airlines advanced on hopes that demand for flights is picking up. Global passenger traffic at airports around the world increased 8pc in June, the Airports Council International said in Geneva.

Aer Lingus tacked on 2.1pc to close at 97c. Ryanair added 1.3pc to close just 5c shy of the psychologically important €4 mark.

Glanbia ended the day up 2pc at €3.37 after touching a 52-week high during trading after a peer reported better-than-expected profits.

Two years ago, a 5.6pc decline in the value of Allied Irish Banks would have sent shockwaves through the investment community. These days, such gyrations are common and do little to knock the benchmark.

Shares in the bank slid as much as 10pc in early trading, but closed down 5.6pc at 93c after the lender said rising loan losses helped to more than double its first-half loss.

"These results highlight starkly the pressure on Allied Irish's pre-provision profits," said Emer Lang of Davy Stockbrokers. Bank of Ireland slipped 2.3pc to 85c.

In Britain, it was a different story with Lloyds climbing 3.5pc after Britain's largest mortgage lender reported a profit for the first time since its acquisition of HBOS almost 19 months ago.

Revenue

Clothes retailer Next plummeted 7.8pc after forecasting "more restrained" consumer spending in the second half as a revenue decline accelerated. Marks & Spencer lost 2.9pc.

European stocks were little changed after better-than-forecast data on US company hiring and services growth offset concern that China's banking regulators are bracing for home-price declines of as much as 60pc.

Electricite de France, Europe's biggest power generator, rallied 5.4pc after the French government agreed an increase in electricity prices.

The Stoxx Europe 600 Index rose less than 0.1pc to 262.18, having swung between gains and losses at least 10 times.

European stocks pared gains after a person with knowledge of the matter said China's banking regulator told lenders last month to conduct a new round of stress tests to gauge the impact of residential property prices falling as much as 60pc in the hardest-hit markets.

Previous stress tests carried out in the past year assumed price declines of 30pc. The tougher assumption may underscore concern that last year's record $1.4 trillion (€1.06 trillion) of new loans fuelled a property bubble that could lead to a surge in delinquent debts.

Irish Independent

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