BoI and AIB up as banks rally strongly on ECB lending boost
European shares bounced back on Friday, with a recovery in metal and oil prices boosting commodities stocks and the European Central Bank's new cheap funding plan supporting lenders in the euro zone periphery.
The pan-European FTSEurofirst 300 index was up 2.4pc to 1,342.42, after falling 1.8pc in the previous session.
In Dublin the Iseq index closed up 2.46pc at 6,341.75.
The banking stocks index in Europe was up 4.1pc, the top sectoral gainer, after choppy moves on Thursday when the ECB cut rates and said it would start buying corporate debt and even pay banks that lent to companies in an attempt to kickstart growth.
The prospect of cheap ECB loans lifted European lenders.
Bank of Ireland shares closed up 8.15pc at 29.2cents each. AIB was up close to 5pc at €4.71 a share.
Elsewhere, lenders like Banco Popular and Bankia of Spain and Italy's UniCredit and Intesa Sanpaolo jumped 7 to 11 percent each.
The broader European stock market fell in the previous session and the euro rose after ECB President Mario Draghi said more rate cuts were unlikely, but bank shares outperformed on plans for a new round of cheap funding.
Citi advised clients to buy European bank stocks saying they were relatively immune to the euro strength and looked a lot cheaper, and to short industrials because of their foreign exchange sensitivity, rich valuations and poor earnings trends. The industrials index was up 2.8 percent.
Commodities-related stocks were also in demand after prices of metals and crude oil rose. The European oil and gas index advanced 2.6pc as oil prices rose than 2pc.
However, Exane BNP Paribas said it was turning cautious on the mining sector.
Additional reporting by Reuters