Resurgent banks play stabilising role as CRH woes linger
IRISH shares were essentially flat yesterday, as traders looked forward to the government announcement on the cost of Anglo Irish Bank today, with strong performances from the banks more or less cancelling out falls across the construction sector.
For the day, the benchmark ISEQ Overall Index slipped 0.15pc, or 4.08 points, to close at 2,657.48. The index passed the 2,680 level in early trading before falling back to post a small loss.
Once again, the banks were the centre of attention, with all three rebounding despite the fact that Irish bond yields remained high.
AIB stormed back, closing up 10.40pc at 55c, while BoI made it back above its issue price, climbing 6.54pc to 57c on heavy trading. Irish Life & Permanent closed up 0.74pc at €1.37.
"Everyone is waiting for the announcement of the Anglo figure," said one market player.
"You saw a huge move back to the banks as there is a feeling that most of their troubles are priced in at the moment so they may be available at a discount now.
"There are a lot of rumours around about the financials so hopefully the Government can at last provide some certainty to the market," he added.
Ultimately, those gains were marginally outweighed by losses in the construction sector, with CRH losing 1.7pc to €12.14 and Kingspan falling 3.71pc to €5.53. Readymix stumbled to 17c, down 2.86pc.
Ireland was not the only country that suffered marginal losses on the day. National benchmark indexes declined in 13 of the 18 western European markets. France's CAC 40 fell 0.7pc, while Germany's DAX Index lost 0.5pc. The UK's FTSE 100 Index slipped 0.2pc. The composite Stoxx Europe 600 Index declined 0.5pc.
"There are still too many risks in Europe and the region's debt crisis isn't over," said Jens Finkbeiner, at F+m Financial in Frankfurt. "We're still getting some earnings missing estimates and the news flow in general is not positive enough to really convince the market and push it to the upside."
H&M, Europe's second-largest clothing retailer, sank 6.5pc as the company said its gross margin narrowed.
In London, financial stocks took a beating after UK mortgage lending fell for a fourth month in August, according to Bank of England figures, adding to signs the housing-market recovery is faltering as the prospect of budget cuts looms.
HSBC, Europe's biggest bank, fell 1.6pc, Lloyds Banking Group lost 1.3pc and Barclays slid 1.2pc.
BP limited declines, rising 3.9pc after it was reported to be working on a possible settlement following its oil spill in the Gulf of Mexico.