Welcome boost for ISE on back of EU debt crisis deal
Published 23/07/2011 | 05:00
IRISH shares rose yesterday, as traders reacted positively to the news that EU leaders had reached a deal on Greece and the wider EU debt crisis.
By the close of trading the ISEQ Overall Index had risen sharply to 2,927.38 -- a gain of 1.42pc, or 40.87 points. That was the index's biggest increase since early May.
The deal agreed on Thursday secured another bailout for Greece as well as reducing the interest rate on Ireland's bailout repayments.
Ratings agency Fitch said the deal equated to a "selective default" by Greece but that was not enough to deter traders, who went on a relentless buying spree throughout the session.
Petroneft was the big winner on the day after a change of the tax code in Russia looked set to reduce the cost of producing oil at the company's fields in Siberia. The stock finished the day up 6.89pc at 38c.
As has been the case for sometime now, food stocks had a strong day, with Greencore closing up 2.55pc at €1 while Glanbia was lifted 2.26pc to €4.76. Donegal Creameries added 3.65pc to reach €3.84 while Aryzta jumped 1.39pc to close at €37.47.
There were also losers on the day, although they were few and far between. Origin Enterprises was a particular standout, slumping 6.32pc to €3.56.
Elsewhere, European stocks rose with the Stoxx Europe 600 Index posting its first weekly gain in three, on the back of the EU deal.
National benchmark indices advanced in 14 of the 18 western European countries. France's CAC 40 Index gained 0.6pc. The UK's FTSE 100 Index increased 0.5pc, and Germany's DAX Index rose 0.4pc. Greece's ASE Index rallied 5.9pc for its biggest gain in 14 months.
"The general view is that it appears to be a comprehensive deal that exceeded market expectations," said James Knightley, senior economist at ING Bank in London. "However, the underlying economic fundamentals remain concerning."
Vodafone rose 2.3pc as demand for smartphones bolstered data sales. Data revenue jumped 25pc as customers made more use of Apple's iPhone and handsets running Google's Android phone-operating system.
Volvo climbed 3.6pc, as demand in Europe and North America increased. Scania jumped 5pc.
Adidas advanced 3.5pc.