Thursday 14 December 2017

Shares rise as jobs and bank data help drive stocks up

Peter Flanagan

IRISH shares closed the week at a six-month high yesterday, as better than expected jobs data from the US combined with positive news from Bank of Ireland helped drive stocks up across the board.

On the day the ISEQ Overall Index rose 1.58pc, or 46.55 points, to close at 2,984.32 -- its highest point since June 28 last year. That capped a strong week for the benchmark index, which rose some 3.25pc from its Monday opening of 2,890.67.

Gains were driven by CRH, which added 1.73pc to close at €16.50 after the US jobless rate fell more than expected. The suggestion that the economic climate across the pond may be improving was a boon to the construction giant, which does half of its business in North America.

That jobs news ensured most companies with interests in the US rose on the day. Kerry Group added 1.41pc to reach €25.10 while Glanbia edged up 0.24pc to reach €4.21.

Bank of Ireland jumped 5.49pc to 38c amid reports that the bank was nearing a deal for the Government to provide capital without increasing its stake in the lender. Allied Irish Banks rose 3.69pc to 25c. Irish Life & Permanent was flat a day after announcing plans to cut staff and hike interest rates. Laggards on the day were few and far between but the oil and gas explorer Providence Resources fell 1.4pc on light trading, slipping to €2.81. Bookmaker Paddy Power was one of the few major stocks to finish in the red, closing down 0.34pc to €29.50.

Outside of Ireland, most European stocks gained on the back of the US jobs report. National benchmark indexes rose in 13 of the 18 western European markets. The UK's FTSE 100 advanced 0.2pc, while Germany's DAX rose 0.3pc. France's CAC advanced 0.3pc. The composite Stoxx Europe 600 Index rose 0.3pc.

"The drop in the unemployment rate was clearly a massive change and has to be welcomed," said Philippe Gijsels, the Brussels-based head of research at BNP Paribas Fortis Global Markets. "Still, the job market remains fairly weak and this remains the focal point for the Federal Reserve, for them to continue on the path of quantitative easing."

In London, Barclays added 2.4pc. Banks across Europe rose as Goldman Sachs turned bullish on the industry for the first time since September 2009. Goldman strategists cited the shares' relative low valuation and easing concern about Europe's sovereign-debt crisis.

HMV jumped 8.8pc, the biggest gain in almost a month, on reports a company shareholder was looking at options including a break-up of the company.

Irish Independent

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