US investors go on AIB buying spree
IRISH shares were little changed as Allied Irish Banks surged and airlines fell on fears that rising oil prices will eat into profits.
The benchmark ISEQ Overall index closed down four points at 2,948.25. AIB soared 43pc to 33 cents as investors from the US followed Monday's bullish trading on the New York Stock Exchange with a buying spree in Dublin.
Some traders blamed the surge in what is still a penny stock on technical reasons, while others suggested that a hedge was involved in short selling which is still legal in the US but banned in Dublin. AIB declined to comment.
The shares advanced long before Standard & Poor's said it was keeping its rating for AIB and Bank of Ireland unchanged, while it lowered Irish Life & Permanent Plc to BB+ from BBB-, the lowest notch above junk. Bank of Ireland pared recent advances, falling 5.6pc to 32c. Irish Life & Permanent inched up 2.4pc to 13c.
Aer Lingus closed down 1.8pc at 73pc, while Ryanair slipped 0.5pc to €3.32 on concerns that rising oil prices could knock profits.
Elsewhere in Europe, stocks climbed for a third day, led by technology companies, after Texas Instruments agreed to buy National Semiconductor, fuelling optimism that spending will push shares higher.
STMicroelectronics and Infineon Technologies, Europe's largest chipmakers, led gains on the Stoxx Europe 600 Index.
The Stoxx 600 gained 0.2pc to 280.91. The benchmark has risen 7.1pc from this year's low as investors speculated that the economic recovery will withstand Japan's earthquake and popular revolts in the Middle East and North Africa.
"More shareholder-friendly policies are being made possible thanks to past corporate deleveraging and significant cash positions, with a mix of dividends, buybacks or M&A moves," Alain Bokobza, the head of asset allocation strategy at Societe Generale wrote in a report. "We maintain a heavy exposure to European equities."
National benchmark indexes rose in six of the 18 western European markets. The UK's FTSE 100 Index lost 0.2pc, while France's CAC 40 Index and Germany's DAX Index both retreated less than 0.1pc.
China raised interest rates for the fourth time since the end of the global financial crisis to restrain inflation and limit the risk of asset bubbles developing in the fastest-growing major economy. The benchmark one-year lending rate will increase to 6.31pc from 6.06pc.
Travel group TUI rose 3pc after Europe's biggest tour operator said it has held talks with potential buyers of a stake in its container shipping unit, Hapag-Lloyd. Reuters reported that a state fund in Oman has bought a 15pc stake in Hapag-Lloyd.