Shares fall on Monti's plan to quit
Published 11/12/2012 | 05:00
IRISH shares fell yesterday, as Italian Prime Minister Mario Monti said he would resign, sparking renewed fears about the future of the Italian economy.
By the close in Dublin, the ISEQ Overall Index had fallen 0.38pc, or 12.84 points, to close at 3,334.93.
The fall snapped a three-day winning streak.
More than twice as many stocks fell as rose on a day that saw the market beat a retreat from the opening before mounting a slight recovery in the afternoon.
Mr Monti said he would quit after losing support in parliament. Silvio Berlusconi, his predecessor, announced a return to politics.
The yield, or interest rate, on benchmark Italian bonds surged 29 basis points, while Spanish equivalents surged 10 basis points.
The airlines were among the laggards in Dublin. Ryanair slid 1.1pc to €4.79, while Aer Lingus dropped 0.9pc to €1.08. The self-styled "low fares" airline has reportedly made a host of concessions to European regulators in an effort to secure its proposed takeover of the former flag carrier. Analysts, however, remain sceptical it will succeed.
DCC dipped 1.04pc to €23.75. The conglomerate completed a deal to buy a fuel-distribution business in Norway and Sweden.
Pharmaceuticals firm Elan surged 4.04pc to €7.99. Dr Lars Ekman formally retired from the board of the company.
Traders were a little more optimistic around the continent, with national benchmark indices gaining in 10 of the 18 western European markets.
Germany's DAX and France's CAC 40 added 0.2pc, while the UK's FTSE 100 rose 0.1pc, while the benchmark Stoxx Europe 600 Index added 0.1pc.
"After equities got off to a negative start due to the rising political uncertainty in Europe, we are seeing markets paring their losses," said Witold Bahrke, a senior strategist at PFA Pension in Copenhagen.
"Regardless of the negative news out of Italy, downside to European equities is limited first and foremost due to [ECB president Mario] Draghi's [bond buying programme]."
UniCredit declined 5.2pc, the biggest drop in four months, as Italian shares had a particularly tough day. Banca Monte dei Paschi fell 5.9pc.
Fiat, Italy's largest carmaker, lost 3.5pc, snapping four days of gains.
Imtech, the provider of infrastructure for stadiums in this year's Olympics, lost 4.4pc after gaining for eight straight days.
Press reports indicated that a Dutch appeals court said the company presented false accounts as evidence in a bonus-payment dispute. Imtech denied that it committed forgery and said it found the judgment "utterly incomprehensible".