Weak banks lead the ISEQ lower
Published 30/03/2010 | 05:00
IRISH shares fell, led lower by Allied Irish Banks on concern the Government will take a majority stake in the lender.
The ISEQ suffered its biggest one-day drop in almost two months with AIB enduring its worst one-day drop in five months. The benchmark eventually closed down 54.57 points, or 1.7pc, at 3157.61 points.
Allied Irish shares plunged 20pc to €1.37, while Bank of Ireland was down 10.4pc at €1.25 amid uncertainity about the scale of the stake the Government will eventually hold in each bank Please see seperate story on bank share prices for more details.
The slide in the banks overshadowed gains elsewhere among exploration companies which issued new shares.
Oil and gas explorer Petroceltic International surged 14.3pc to 16c after the company raised $120.5m in a private placement to fund further exploration. Shares in Kenmare rose a more modest 3.2pc, also to 16c, after the company rasied €270m in a share placement to expand production at its mine in southern Africa.
Aer Lingus continued to build on recent gains, moving up 3.6pc to 72c as investors welcomed chief executive Christoph Mueller's ability to win significant concessions from employees without industrial action. The shares are now at their highest levels since mid January.
Among food stocks Glanbai extended its recent strong run adding a further 10 cent, or 3.5pc, to end at a recent high of €3.10.
Ireland's woes were the exception rather than the rule with the pan-European FTSEurofirst 300 ending higher yesterday after mining stocks gained on the back of strong metals prices.
Vodafone, a popular share with Irish investors, rose on reports of talks with US partner Verizon over dividend payments.
The FTSEurofirst 300 posted its fourth weekly gain last week, and is on track to post a rise of more than 7pc in March.
Analysts expected equities to be well supported as the end of the first quarter looms, but they warn that some consolidation could be expected in the coming weeks following recent strong gains.
"We're now getting to the point where people are saying we have had some terrific gains and maybe we have come a little bit too far too soon and we could see some consolidation," said Joshua Raymond at City Index.
Miners were in demand as metals prices rallied. Copper hit its highest in about three months as the dollar softened, while expectations of stronger demand from China lent additional support to prices.
Vodafone was 3pc higher after UK media reports that the firm was in holding talks with US joint-venture partner Verizon over the payment of a dividend. A Vodafone spokesman declined to comment.
Banks were lower. Barclays, HSBC, Lloyds, Commerzbank and Deutsche Bank shed between 0.1pc to 1.8pc.