Markets bracing for further volatility as Brexit vote looms
Investors and currency traders are bracing for a markets showdown next week, with UK Prime Minister Theresa May on course to lose the crunch vote on her Brexit deal.
Failure to get the deal across the line will create a wave of uncertainty for world stock markets, with sterling likely to come under pressure.
Ireland's main stock market index - the ISEQ Overall Index - rose 1pc yesterday, recouping just some of Thursday's 3.1pc drop that wiped €2.5bn from the combined value of its constituents.
Yesterday, shares in companies including building materials giant CRH and packaging giant Smurfit Kappa rose.
The ISEQ Overall Index has slumped more than 20pc over the past year, knocking €19.2bn off the value of stocks on the Irish market.
In the past week alone, €3.4bn has been sliced from the value of stocks on the index.
Insulation maker Kingspan edged less than 1pc higher even as Opec and other partners agreed a larger than expected cut in oil production.
Crude oil prices surged as much as 5.8pc in London, raising the risk that the deal could anger US President Donald Trump, who had urged the group of producers to keep taps open and prices low.
The oil agreement also comes in a week that Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei, and the daughter of its founder, was arrested in Canada and faces extradition to the United States.
That has intensified concerns of a trade war between the US and China - which had entered a détente - being reignited after the two countries had appeared on track to resolve it.
Meanwhile, some traders believe the turmoil next week following the Brexit vote could be so intense as to be instrumental to the Brexit process itself.
While market response and pressure on sterling could be more muted than that when the UK voted to leave the EU in the 2016 referendum, some banks are taking no chances.
Markets in Europe will be closed when the outcome of the UK parliament's vote is known next Tuesday around 7pm, but currency markets operate 24 hours a day.
A failure to get the deal passed could herald more uncertainty over the Brexit process and big market swings may follow. Some commentators suggested that heavy market losses could even convince the UK's MPs to back Ms May if she tried for a second Brexit vote.
Additional reporting: Reuters and Bloomberg