Shares swing amid bailout fears
Published 17/11/2010 | 05:00
IT was another day of "will they, won't they?" as markets in both Europe and the United States ebbed and flowed on the back of continuing speculation that Ireland will be forced to accept an up to €100bn bailout that will serve as the final nail in the coffin for the Celtic Tiger.
More critically, the drama being played out threatens to leave the fabric of the eurozone and even the European Union itself in tatters.
The ISEQ Overall Index closed down almost 1.7pc, or over 45 points, to finish the session at 2,651.80. It had briefly ticked up around lunchtime before spiralling downwards in the afternoon.
Shares in Allied Irish Banks, already facing the prospect of effective nationalisation, sank as much as nearly 9pc during the day before recovering some ground to end down almost 3.5pc at 39 cent. Bloomberg noted that AIB has to meet the equivalent of about $1.8bn (€1.3bn) of early bond repayments before the end of the year.
Bank of Ireland closed down over 1.2pc, also at 39 cent. Irish Life & Permanent, which releases an interim management statement on Friday, fared the worst amongst financial stocks, sinking over 5.8pc, or 5 cent, to 82 cent.
Few Irish stocks fared well amid the continuing turmoil and uncertainty. The Irish Stock Exchange's heavyweight, CRH, eased 1.3pc or 18 cent to finish at €13.51. Packaging group Smurfit Kappa declined over 3pc, or 24 cent to €7.56, while Ryanair fell 3.3pc, or over 12 cent to €3.67.
Rival Easyjet said it was going to focus more on business customers and said it expects revenue per seat to be flat in the current first half of its financial year.
Gainers included drinks group C&C, which added 4 cent, or 1.2pc, to €3.24, while ferry operator Irish Continental rose 1.3pc, or 20 cent, to close at €15.30.
National benchmark stock indices fell across all 18 western European markets except, somewhat ironically, Iceland. The UK's FTSE-100 tumbled 2.4pc while France's CAC 40 slid 2.6pc and Germany's DAX lost 1.9pc as traders fretted over the potential impact of a possible Irish bailout, concerns that China may have to take fresh measures to curb inflation and fresh fiscal worries in Greece. The falls in European stocks were the biggest in four months.
BHP Billiton, the world's largest mining company, and Rio Tinto fell 3.5pc to £23.21 and 4.7pc to £41.25 respectively, leading European basic-resource shares to the worst performance among 19 industry groups in the Stoxx 600.
HSBC lost 2.3pc to £6.66, while BNP Paribas, France's largest bank, dropped 3.4pc to €51.58.