Monday 19 February 2018

Anticipated Fed move triggers gains

Thomas Molloy

IRISH shares slipped despite gains elsewhere in Europe and on Wall Street yesterday. The benchmark ISEQ Overall Index fell 14 points, or 0.6pc, to 2438 points as shares in the financial services sector and CRH dipped. Shares in the world's major markets gained amid continuing speculation the US Federal Reserve will take action to bolster the economy.

Irish Life & Permanent was among the biggest decliners in Dublin yesterday, slipping 14.3pc to 3c. Bank of Ireland was down 5.3pc to 9c.

IFG, the financial services company that offers pensions and mortgages, declined 2.4pc to €1.60 amid reports that the company asked two potential bidders to make non-binding offers before its earnings release next week.

IFG has risen 26pc this year, making it the fourth-best performing stock on the 51-member ISEQ Index after the company said on May 4 it had received a takeover approach. Allied Irish bucked the trend, advancing 1.9pc to 5c as it said it was moving 1,000 staff to save money.

National benchmark indices rose in half of the 18 western European markets. The UK's FTSE 100 gained 0.7pc, while Germany's DAX and France's CAC 40 advanced 1.1pc.

Greece's ASE lost 3.2pc as it hit its lowest level since 1996. The benchmark Stoxx Europe 600 Index added 0.8pc to 226.63 at close in London. Earlier, it had surged by as much as 2.2pc.

The gauge has fallen 22pc from this year's peak on February 17 as European and US economic data that trailed forecasts added to concern that the global recovery is at risk.

The retreat has left the Stoxx 600 trading at about 9.4 times its companies' estimated earnings, near the lowest since March 2009.

The US Federal Reserve is holding its annual symposium in Jackson Hole, Wyoming, this weekend. This time last year Federal Reserve chairman Ben Bernanke hinted that the central bank might embark on a second round of asset purchases, kicking off a 28pc rally in the Standard & Poor's 500 Index that ended in a three-year high on April 29.

UBS, Switzerland's biggest bank, advanced 2.1pc after saying it plans to cut 3,500 jobs to trim costs. Charter International soared 20pc as the welding and automation equipment maker said it was in takeover talks with a potential rival bidder to Melrose.

"Much of the gains being seen here seem to be coming off the expectation that the Fed will serve up further stimulus measures, possibly as soon as the end of this week," said Cameron Peacock, a market analyst at IG Markets in Melbourne.

Stocks pared their advances as a gauge of German investor confidence fell to the lowest point in more than two and a half years in August over concern Europe's debt crises will curb growth.

Irish Independent

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