World

Tuesday 22 July 2014

Shares see biggest surge in over three months

Major Irish companies get huge trading boost ahead of Christmas

Peter Flanagan

Published 20/12/2012|05:00

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IRISH shares surged the most in more than three months yesterday, as big gains among some of the major companies on the market boosted trading ahead of Christmas.

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By the close in Dublin the ISEQ Overall Index had jumped 1.64pc, or 54.55 points, to close at 3,387.61. It was the index's biggest percentage gain since September 6.

Twice as many stocks rose as fell during a session that saw heavy buying from the off. At 113 million shares, volumes were the highest in a fortnight.

CRH was the most notable mover. The construction giant rocketed up 5.03pc to €15.04, its highest level since September.

Boost

The stock was boosted by progress in the negotiations on the so-called 'fiscal cliff' in the US, where CRH does close to half its business, while analysts at Deutsche raised the stock to "buy".

Total Produce surged 4.9pc to 57c. The fresh produce distributor said it would buy into a Canadian firm earlier this week.

Progress on the fiscal cliff boosted trading across the board. The pharmaceuticals firm Elan bumped up 3.1pc to €8.05, while Irish Ferries owner, Irish Continental Group, climbed 3pc to hit €18.70.

Few stocks made significant moves on the other side of the board. Aer Lingus fell 1.7pc a day after the Government said it would not sell its stake in the former flag carrier to Ryanair. Independent News & Media fell 52.4pc.

There was pre-Christmas optimism all over the rest of Europe too, as stocks climbed to their highest level in 19 months on German business confidence which rose more than forecast and optimism mounted that US policy-makers will reach an agreement on next year's budget.

The Stoxx 600 climbed 0.4pc, while national benchmark indices rose in every western-European market except Finland. France's CAC 40 and the UK's FTSE climbed 0.4pc. Germany's DAX gained 0.2pc while Greece's ASE rallied 4.8pc.

"The market is still focused on the fiscal cliff talks in the US, in which investors seem to expect an agreement relatively soon," said John Plassard, vice president at Mirabaud Securities in Geneva.

"News such as the upgrade of Greece's credit rating is positive, albeit not a big surprise, helping to continue a year-end rally. Sentiment at the beginning of 2013 will be cautious as we face some political risk."

The Stoxx 600 rose for the first time in four days yesterday as US President Barack Obama changed his position on tax increases.

That led to optimism US lawmakers will agree on a compromise budget, preventing swingeing budget cuts and spending hikes – known as the fiscal cliff – from coming into force at the beginning of next year.

In Germany, business confidence climbed to 102.4 in December from 101.4 in November, higher than expected.

HeidelbergCement, the world's third-largest maker of cement, gained 4.9pc. MainFirst Bank raised the stock to outperform from neutral, meaning that investors should buy the shares.

Merck fell 2.1pc, dropping for a seventh day, after saying that the drug formerly known as Stimuvax failed to significantly improve the survival of patients suffering from lung cancer in a late-stage study of more than 1,500 people.

In London, Lloyds gained 4.4pc and RBS advanced 3.4pc. HSBC, Europe's biggest bank, climbed 2pc.

LSE advanced 2.9pc after it was reported Europe's oldest independent bourse lowered its bid for a majority stake in LCH.Clearnet by 30pc.

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