Monday 24 June 2019

Irish shares braced for volatile trading

Brexit fear bites

'Last week, around €3.4bn was the value of stocks on the Irish Stock Exchange and the index has been on a downward slide since September.' Stock image
'Last week, around €3.4bn was the value of stocks on the Irish Stock Exchange and the index has been on a downward slide since September.' Stock image
Samantha McCaughren

Samantha McCaughren

The Irish stock market is braced for another week of volatile trading, with concerns over continued Brexit uncertainty hitting shares in recent days. While trading improved on Friday, brokers said that even stocks with little or no Brexit exposure had been hit by last week's sell.

One stock market source said last week's trading was reminiscent of the volatility last seen in 2007 just before the economic crash. However, a number of traders said they believed there is now significant value in the Irish market given that many stock are now 30pc or 40pc off their 2018 peaks.

Among those which saw some recovery on Friday were CRH, Smurfit Kappa and Kingspan.

Last week, around €3.4bn was the value of stocks on the Irish Stock Exchange and the index has been on a downward slide since September.

While Irish shares are being hit by growing concerns that British Prime Minister Theresa May will lose a vote this week on her Brexit deal, there has also been massive international volatility.

On Friday, US stocks plunged, with technology shares bearing the worst of the selling as the Trump administration pressed its trade war with China.

In addition, the latest batch of economic data added to concern that growth has peaked. Oil surged after Opec agreed to cut output.

Trade remained in focus, with investors monitoring a court appearance by a Huawei executive whose arrest was seen as a blow to the China-US trade truce. The Federal Reserve's Lael Brainard struck a hawkish tone in comments at a conference.

US stocks had opened higher after the November jobs report showed moderation in the labour market, giving succour to proponents for a slower pace of Fed interest-rate increases. Treasuries fluctuated on the data before settling higher as risk aversion increased. The dollar remained lower.

In Europe, stocks rebounded from the worst day in more than two years, while Asian shares posted modest gains as investors sought to end a bruising week on a more upbeat note. Italian debt climbed as European bonds largely drifted.

Additional reporting Bloomberg

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