Saturday 17 March 2018

Lower bond yields give ISEQ boost

Peter Flanagan

IRISH shares rose slightly yesterday as comments by Aer Lingus chief Christoph Mueller and a lowering yield on Irish government bonds lifted the market.

On the day, the ISEQ Overall Index rose 0.83pc, or 22.63 points, to close at 2,780.6 points. Recruitment company CPL, Tullow Oil and airline stocks drove the market, outweighing declines in construction giant CRH and some food stocks.

CPL rose 4.23pc to €2.45 as traders digested the results the recruitment firm posted on Wednesday. Despite posting results in line with expectations, the stock dropped that day, however it recovered its losses yesterday amid speculation that the stock was now underpriced.

Oil and gas explorer Tullow Oil soared 5.56pc to €15.20 amid continuing speculation that the company was in play while the airlines, Ryanair and Aer Lingus, both posted gains. Aer Lingus rose 3.23pc to 96c on the back of comments by its chief executive, Christoph Mueller, while Ryanair gained 1.21pc to close at €3.93.

Few stocks traded down yesterday but CRH continued its negative year, losing 0.15pc to reach €13.02 amid speculation that the US plan to renovate its infrastructure may be blocked while Origin Enterprises and Fyffes, who both deal in fresh produce, slumped. Fyffes fell 2.86pc to 34c while Origin dropped 3.46pc, closing at €2.51.

Ireland's day fitted the pattern of trading across Europe after a report showed fewer-than-estimated Americans applied for jobless benefits last week. National benchmark indexes rose in 16 of the 18 western European markets. The UK's FTSE 100 and France's CAC gained surged 1.2pc while Germany's DAX climbed 0.9pc. The composite Stoxx 600 gained 1.1pc. "When we don't double-dip, all the money that has moved into government bonds, you wait and see what happens when that all comes out," said Anthony Dwyer, chief equity strategist at Collins Stewart. "The direction of earnings is higher, costs have not been increased and interest rates are extraordinarily low and stimulative and that should lead to much higher stock prices down the road."

In London, financial stocks led the way. Barclays snapped three days of declines, climbing 5pc; Royal Bank of Scotland increased 5.1pc. Xstrata Plc, the world's fourth-largest copper producer, led a gauge of mining shares higher amid easing concern about the strength of the US economy. The shares climbed 3.3pc, Vedanta Resources Plc added 3.4pc and Lonmin increased 2.4pc.

HMV slumped 11pc to 59.25p, the most since December 2008, as the music and DVD retailer said sales at outlets open at least a year in the UK and Ireland fell 15pc in the 19 weeks ended September 4.

The retailer also said its finance director, Neil Bright, will leave the company in December to join Holidaybreak.

Irish Independent

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