Oil explorer stars on slow day
Published 03/11/2010 | 05:00
IRISH shares continued their indifference yesterday as the market remained in a holding pattern in anticipation of events in the US that would play out last night and today.
An afternoon surge led the ISEQ Overall Index into positive territory, closing up 0.61pc, or 16.42 points, as traders waited for the results of both the US mid-term elections and the Federal Reserve meeting last night.
A decision was expected to be made on whether the Fed would pump more cash into the economy.
The star of the day's trading was the oil and gas explorer Providence Resources which jumped by more than a third after the company flagged a potential oil discovery off Dublin.
The Dalkey Island target may contain up to 870m barrels, according to Providence. Davy Stockbrokers said that while significant risk remains, the prize is large and, being located only 10km from Dublin in shallow water, would be relatively easy to bring to market.
Unsurprisingly, the stock was up from the opening, ending the day up 33pc at €3.20.
Providence's announcement helped bring up most oil and gas players, with Dragon Oil closing up 0.81pc at €5.25 and Petroneft increasing 3.45pc to 57c. Petroceltic finished up 7.69pc at 14c.
Those gains helped offset losses against some major stocks, with the banks all falling as bond yields hit a new record high.
The yield on Irish 10-year bonds touched 7.4pc at one stage, as speculation continued that Ireland would struggle to pay its debts.
Allied Irish Banks slipped 1.47pc to 34c while Bank of Ireland lost 3.85pc to close at 50c. Irish Life & Permanent shipped 2.67pc to finish at €1.46.
It was a positive day across Europe, with national benchmark indexes rising in 17 of 18 western European markets. The FTSE 100 Index advanced 1.1pc, France's CAC 40 Index increased 0.6pc and Germany's DAX Index jumped 0.8pc. The composite Stoxx 600 added 0.4pc.
"Today is all about what the Fed is going to do," said London-based Mike Lenhoff, chief strategist at Brewin Dolphin Securities. "In addition to the Fed, earnings news-flow has also been very good and continues to beat expectations."
In London, the big winner was BP which advanced 1.8pc after the company reported third-quarter profit, excluding one-off items and inventory changes, of $5.5bn (€3.91bn), beating the average analyst estimate of $4.6bn. Net income dropped 66pc to $1.8bn after the company took a further pretax charge of $7.7pc related to the Gulf of Mexico well disaster.
Imperial Tobacco rallied 1.9pc after it more than doubled full-year profit to £1.51bn (€1.72bn) as higher prices offset a decline in shipments.