Nonchalant ISEQ closes up 0.9pc
WHILE traders around the world fretted about Ireland's economic future and rumours of a leadership bid fizzed in Dublin and bond yields rose to catastrophic levels, the ISEQ put in a typically nonchalant performance as it advanced in tandem with shares elsewhere in Europe.
The ISEQ closed up 24.57 points, or 0.9pc, at 2,731.22 -- proof if it were needed that the benchmark is now driven almost completely by international trends.
National benchmark indices advanced in 15 of the 18 western European markets yesterday. France's CAC 40 rose 1.8pc, while the UK's FTSE 100 rose 1.7pc. Germany's DAX Index gained 1.4pc but Greece's ASE Index and Portugal's PSI-20 fell.
Among the biggest gainers were Aer Lingus which closed up 4.2pc at exactly €1 as chief executive Christoph Mueller continues to cut costs and investors speculate about some sort of tie-up with a rival. Ryanair closed up 2.8pc at €3.85. Norkom advanced 10pc to 89c as the company pared some of last week's plunge following a profit warning.
Allied Irish extended Friday's slide, falling 1.1pc to 61.3c after being booted out of the Stoxx Europe 600 Index on Friday. Rival Bank of Ireland, now the only Irish bank in the index, closed up 5pc at 64.9c.
As reported elsewhere, the extra yield that investors demand to hold 10-year Irish bonds over German bonds exceeded 400 basis points for the first time as the Government struggled to convince investors it can cap the cost of bailing out its banking system.
Portugal also touched a record yesterday as an increasing number of bondholders worry both it and Ireland may have to follow Greece and ask the European Union and the International Monetary Fund for a rescue sometime next year.
Finance Minister Brian Lenihan has denied this but has given no detailed explanation of how Ireland will avoid such a measure. Contracts insuring against an Irish default rose to a record 450 basis points yesterday from 421.
Elsewhere in Europe stocks rallied, snapping four days of losses for the Stoxx Europe 600 Index, as investors speculated that the continent's economy will avoid another recession. BP jumped 21.pc while Brit Insurance jumped 4.1pc.
Hammerson climbed 3.3pc, leading a gauge of European real estate shares to the second-biggest gain among 19 industry groups in the Stoxx 600 on reports it may sell land.
Sudezucker climbed 4.5pc, the biggest advance in eight months. The world's largest sugar refiner said it expects full-year operating profit to increase to more than €450m.
Fiat climbed 4.7pc. Brokerage Sanford C. Bernstein upgraded the Italian carmarker to "outperform" from "market perform."