Surge in markets as Greece says 'yes' to €28bn plan
But many believe move is short reprieve before eventual default
Published 30/06/2011 | 05:00
All eyes on Greece again -- no surprise there, then -- as the stricken country's parliament passed a deeply unpopular €28bn, five-year austerity plan that the IMF and EU warned was necessary if Greece is to receive additional bailout money and avoid a catastrophic default.
Today will see the parliament vote again -- this time on specific measures for the austerity plan that has caused rioting in Athens.
Markets around the world surged as the plan was approved yesterday, but many commentators still believe Greece has merely engineered a relatively short reprieve and that it will eventually be forced to hit the nuclear button and default.
The boost given to markets also lost steam as many investors sold to crystallise gains made over the past number of days.
The ISEQ Overall Index closed up 30 points, or 1.03pc, at 2942.05. That's its highest close since June 2.
The biggest company on the index -- CRH -- advanced almost 3.8pc, or 54 cent to €14.83. It was up over 4pc earlier during the session.
The gains were made despite a report from the IMF that economic growth in the US will remain slow.
"We see a sustained, even if a bit slow, expansion going forward," according to John Lipsky, the IMF's acting managing director until France's Christine Lagarde takes over next week.
The IMF said the US should consider spending cuts and tax increases. House sales there could be rebounding, however.
Drinks maker C&C, which produces Bulmers and Magners cider, fell 2.56pc, or 9.3 cent to €3.53.
At the company's annual general meeting in Dublin, management said Magners volumes in the UK were 14pc higher in the three months to the end of May and net revenue 10pc higher. Sales of Bulmers rose slightly but revenue declined.
Food group Kerry nudged 0.56pc higher to €28.15. Chief executive Stan McCarthy said he expected earnings to grow at an average of more than 10pc a year for the next five years.
Shares in financial services group IFG were also just slightly ahead at €1.81. Management said at its AGM yesterday that due diligence on its books by two potential bidders was due to commence within 10 days.
Fallers yesterday included food group Greencore, which yielded almost 3.4pc, or 3.5 cent, to €1. That's its lowest close since November 16 last year.
National benchmark indices rose in all 18 western European markets, except Iceland. France's CAC 40 advanced 1.8pc, while the UK's FTSE 100 and Germany's DAX both added 1.5pc.
Allianz, Europe's biggest insurer, increased 3.1pc to €94.88 as the stock was upgraded to "overweight" from "equal weight" at Morgan Stanley.
Ferragamo jumped 8.9pc to €9.80 as the Italian luxury shoemaker debuted on the Milan exchange after raising €344m in an initial public offering.