Slight gain as bailout rumour sparks banking revival
IRISH shares were little changed yesterday, as eyes turned to the EU amid rumours of a potential bailout and a statement supporting Ireland from European leaders at the G20 summit.
Those rumours were firmly denied by the Government, but they had been enough to help stabilise the bond market slightly, with the yield on Irish 10-year bonds falling back for the first time in 13 days.
The ISEQ Overall Index posted a small gain, closing up 0.11pc, or 2.98 points, at 2,675.73. That represented a slight loss for the week, having opened at 2,701.51 on Monday.
"The day was dominated by the potential bailout," said one market player. "The statement by the European leaders this morning was helpful but the market needs certainty. At this stage there is a vacuum and the yields will keep rising until that vacuum is filled."
The banks were again the key stocks on a day of heavy trading, and all three posted strong gains as the bond yields came back a little.
Allied Irish Banks surged 16.31pc to 39c, while Bank of Ireland closed up 6.25pc at 41c with more than 100 million shares traded between Dublin and London. Irish Life and Permanent added 5.71pc to reach 87c. However, it is still down some 42pc over the past 10 days of trading.
The banks' gains helped outweigh losses among other big stocks, with CRH falling 1.88pc to €13.05 on the back of short covering following a positive IMS earlier in the week.
Squaring off positions heading into the weekend was a feature of most of the major stocks that fell. Aer Lingus was another loser, closing down 0.95pc at €1.04.
National benchmark indexes retreated in 11 of the 18 western European markets. France's CAC 40 Index lost 0.9pc, the UK's FTSE 100 Index slid 0.3pc and Germany's DAX Index dropped 0.2pc.
The composite Stoxx 600 pared some losses but fell 0.5pc as investors speculated that China will raise interest rates within weeks to tackle inflation, which accelerated to the fastest pace in 25 months in October.
In London, Royal Bank of Scotland climbed 2.2pc, trimming its weekly retreat to 6.9pc, while Electrocomponents climbed 4.8pc after the world's largest distributor of electronics and maintenance products more than doubled first-half profit.