Business World

Wednesday 27 August 2014

Markets back stay on EU, UK rates

John Mulligan

Published 08/03/2013 | 05:00

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Traders work on the floor at the New York Stock Exchange

European markets rose again – albeit modestly – recouping some of the losses they notched up on Wednesday.

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In Frankfurt, European Central Bank chief Mario Draghi left interest rates unchanged at 0.75pc and said that "economic activity should gradually recover" later in 2013. He said that would be supported by a strengthening global backdrop and "our accommodative monetary policy stance".

The ECB forecast yesterday that the eurozone economy will contract 0.5pc this year. That's more than the 0.3pc fall it previously predicted. It also reckons it will grow by just 1pc in 2014 compared to a previous 1.2pc estimate.

Stocks gained as the Bank of England also left its rate unchanged and unemployment figures in the US were better than expected.

"Investors are hopeful that US economic growth has some foundation," said Jeremy Batstone-Carr, head of research at Charles Stanley in London. Initial claims for unemployment benefits in the US fell to 340,000 last week – a six-week low.

In Ireland, the ISEQ Overall Index was one of the gainers, but just about, as it edged into the black for less than a 0.1pc gain to close at 3,829.75. It had been close to 3,850 earlier.

Focus

Focus yesterday was on stocks including builders merchanting group Grafton. It reported a strong set of full-year figures given the economic backdrop.

But while its shares rose sharply at the open, by more than 3pc, they yielded significant ground later and actually closed down 0.4pc at €4.83.

Shares in ferry operator Irish Continental fared much better. The group said that its operating profit fell 2.2pc to €26.5m last year but improved yields, and steady revenue in the light of the environment in which it is operating encouraged investors. The shares closed up 2.9pc, or 59 cent, at €20.99.

Shares in Bank of Ireland continued to climb after it posted results this week, adding 2.1pc to 14.6 cent.

Drug group Elan declined 2.2pc to €8.78 as Royalty Pharma continues to meet investors about its $6.6bn indicative offer for the Irish firm.

National benchmark indices gained in 13 of the 18 western- European markets. The UK's FTSE 100 Index added 0.2pc and France's CAC 40 rose 0.5pc. Germany's DAX added 0.3pc.

Shares in France's biggest retailer, Carrefour, climbed 2.9pc to €22, its highest price since July 2011. Germany's Adidas climbed 6.6pc to €76.38, the highest price since the shares started trading in November 1995.

Irish Independent

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