Worry over stress tests and earnings weighs ISEQ
Published 24/07/2010 | 05:00
IRISH shares finished the week down slightly as worries about the results of the EU stress tests and poor earnings reports weighed the market.
For the day, the ISEQ Overall index lost 0.66pc or 19.51 points to close at 2,918.08. Despite closing down yesterday, the index was still up 1.02pc for the week, having opened on Monday at 2,855.52.
Ryanair was one of the big losers of the day, dropping 2.94pc, or 12c, to €3.93 on the back of lingering worries from its quarterly results. The budget airline recorded a drop in profit of nearly 24pc earlier in the week.
Pharmaceuticals firm Elan slipped 0.88pc to €3.73 after the drugmaker reported a larger than expected net loss for the second quarter of €158m.
That loss prompted one fund manager to write to the Elan board saying the firm was at a "desperate crossroads".
Those losses overshadowed a surge in Aer Lingus and Bank of Ireland.
The national carrier jumped 3.19pc to 97c after Goodbody stockbrokers increased its target price for the stock to €1.50. The move followed a trading update for the first half of the year the broker described as "bullish".
"The operating improvement clearly has positive consequences for the group's cash pile. Our expectation that net cash would trough at €320m this year is adjusted to now believe that last year's €336m figure was the trough, as we now envisage the cash pile moving up to €366m at the end of this year," said analyst Eamon Hughes.
Bank of Ireland was buoyed after morning reports it would comfortably pass the EU stress tests. By the time those reports were confirmed after hours, the stock was up 1.65pc at 74c.
Across Europe, stocks rallied for a fourth day as the fastest growth rate for the UK in four years and an unexpected surge in German business confidence overshadowed concern about the results of bank stress tests.
National benchmark indexes rose in 10 of the 18 western European markets. The UK's FTSE 100 lost less than 0.1pc, while Germany's DAX advanced 0.4pc. France's CAC 40 gained 0.2pc. The composite The Stoxx Europe 600 Index rose 0.6pc.
"The hope from these stress tests is that we get the clear and transparent information that the market has been looking for," said Azad Zangana, chief European economist at Schroder Investment Management in London.
"Ideally, all banks should pass but of course we know there are some problematic banks out there."
Sports manufacturer Adidas rose 2.2pc after reporting a surge in second quarter net income after the World Cup, but Pernod-Ricard fell 2.3pc as sales missed analysts' estimates.