ISEQ up on bailout deal expectation
Published 10/12/2010 | 05:00
IRISH shares rose for the fourth successive session yesterday amid expectation that the terms of the IMF/EU bailout would be passed by the Dail next week and ongoing positive sentiment from the Budget.
By the close, the ISEQ Overall Index was up 0.98pc, or 27.54 points, at 2845.43 -- its highest close since August. European stocks hit a two-year high for the second successive day.
Financials led the market, with Bank of Ireland and Irish Life & Permanent both posting strong gains.
BoI rose 8.94pc to 47c, still buoyed by its offer to subordinated bondholders to exchange €1.5bn of junior debt for government-guaranteed senior debt. IL&P gained 4.92pc to close at €1.26. Allied Irish Banks closed flat at 50c, weighed by a bonus controversy.
Kerry Group added 2.31pc to reach €25.20, while Aer Lingus surged ahead by 5.81pc on continuing positive sentiment after the 'tourist tax' was cut by 70pc.
Less than 10 stocks ended the day in negative territory but most of those slides were minor.
Sandwichmaker Greencore dipped 1.37pc to €1.37 a day after announcing a small acquisition in the US.
European stocks rose to a two-year high, led by financial shares, as reports reassured investors that the global economic recovery was intact.
National benchmark indexes rose in 11 of the 18 western European markets.
The UK's FTSE 100 gained 0.1pc, France's CAC 40 climbed 0.6pc and Germany's DAX fell 0.2pc.
The Stoxx 600 Index gained 0.2pc.
"Equities are going to be seen as an attractive focus," said Chris Tinker, the founder of London-based Libra Investment Services. Improving free-cash flow and earnings would be "the fundamental support that will drive the equity market outlook. We'll see a more stable environment", into next year.
Fewer Americans filed first-time claims for unemployment insurance payments last week in the US, showing the labour market is continuing to improve.
Japan's economy grew more than the government initially estimated in the third quarter and Australian employers last month added more than double the number of workers economists had forecast.
Societe Generale, the second-largest bank in France, gained 4.5pc as did Barclays, while AXA Insurance advanced by 5.1pc.
In London, RBS rallied 3.2pc, the first gain in five days.
HMV paced declining shares after the music and DVD retailer said its first-half loss widened to £31.3m (€37.3m) on lower demand in UK and Ireland stores. The stock sank 25pc.