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Banks gain as ISEQ closes up 1pc

IRISH stocks climbed yesterday, mirroring gains across Europe as financial companies from HSBC to Allianz reported results that beat estimates.

The benchmark ISEQ Overall Index closed up 39.26 points, or 1pc, at 3940.82 to extend gains over the past five sessions to 2.5pc.

The biggest winner of the day was Donegal Creameries, whose share price rose 18pc to €4.30 in light trading. Permanent TSB also rose, to close up 16pc to 4c a share.

The banks all did well: AIB was up by 6pc to 7c, while Bank of Ireland jumped 5pc to 18c. The gains came as their European peers enjoyed a good day and after British bank RBS recently said that "credit trends in Ireland are turning a corner".

Packaging company Smurfit Kappa rose after the group reported results for the first three months of 2013 last week. Goodbody Stockbrokers said the company's management indicated that European profit margins will improve over the rest of the year.

Food and drink suppliers fell. Food manufacturer Origin Enterprises was down 1.5pc to €4.70 while drinks maker C&C fell 1.7pc to €4.65. Dairy company Glanbia was down 0.9pc to €10.45.

In Europe, national benchmark indexes climbed in 16 out of 18 western European markets. France's CAC 40 added 0.4pc, Germany's DAX increased 0.9pc and the UK's FTSE 100 gained 0.6pc.

The DAX reached an all-time peak during the day, at 8,206.01 points. This is the first major European index to breach the peaks set in 2007, following in the footsteps of the US S&P 500 which has been setting record highs since mid-April.

The Frankfurt index has enjoyed popularity thanks to its strong exposure to faster growing foreign markets, the relatively small banking sector and the perception of Germany as a safe haven within the eurozone.

The composite Stoxx Europe 600 Index rose 0.3pc to 301.74 at the close of trading. The gauge has climbed 7.9pc this year to its highest level since June 2008 as central banks maintained stimulus measures.

"It's been a mixed bag on the earnings front, but surprises are coming through on the financials. I see the market continuing to grind higher," said Kevin Lilley of Old Mutual Asset Managers.

Europe's biggest bank HSBC, France's second-largest lender Societe Generale, and Germany's Commerzbank each climbed at least 2.6pc after posting results for the first three months of 2013. Commerzbank reported a loss of €94m after costs associated with firing staff, compared with a profit of €355m a year earlier, but still beat Bloomberg analysts' estimates.

Europe's biggest insurer Allianz gained 3.6pc to €120.70 a share after reporting a 24pc rise in first quarter profits to about €1.7bn. Results improved at all of its businesses.

Irish Independent