Buoyant showing from Kerry spearheads share rally
Late spree pushes ISEQ higher on back of perception that stocks are undervalued
IRISH shares rose yesterday, as strong results from Kerry Group and a perception that stocks may be undervalued encouraged buying.
By the close of trading the ISEQ Overall Index had risen 1.13pc, or 28.76 points, to 2,566.22 -- its highest point in a fortnight.
The index tumbled early on but surged back into positive territory by mid-morning and stayed there for the rest of the session, with a late spree pushing it higher.
Kerry Group was the star of the day, rising 3.03pc to €27.35 after the company reported higher half-year profits despite increases in input costs. The results were broadly welcomed by analysts who considered the stock undervalued after the market turmoil of recent weeks had seen the company share price fall by 12pc.
Kerry's numbers improved sentiment across the index, and were backed up by Aryzta, which gained 4.64pc to close at €33.49. The Irish-led Swiss giant is basking in positive sentiment from a takeover in the par-baked goods sector.
In percentage terms, the big winner was Petroceltic, which rose by nearly a quarter a day after posting a decent set of interim results. The oil and gas sector in general had a strong day, with Aminex (up 20.83pc) and Tullow Oil (up 3.15pc) both climbing.
Elsewhere, European stocks climbed as some investors speculated that the 9.2pc drop in equities this month made their valuations attractive.
National benchmark indices rose in 12 of the 18 western European markets. Germany's DAX Index retreated 0.8pc and the UK's FTSE 100 Index declined 0.5pc. France's CAC 40 Index gained 0.7pc. The Stoxx Europe 600 Index added 0.2pc.
"Equity valuations are very attractive," said Jason Pride, a strategist at Glenmede. "We're favouring equities, but we're staying defensive. There is a larger risk than normal that you'll have some sort of systemic event happen before the policymakers react in Europe and that's why the markets are hanging out where they are today."
Vestas surged 24pc, its largest advance since 2003. The world's biggest maker of wind turbines reported a second-quarter net income that easily exceeded analyst expectations.
France's Sanofi jumped 2.8pc, leading a gauge of healthcare companies to one of the best performances of the 19 industry groups in the Stoxx 600 yesterday.
Carlsberg tumbled 17pc, its largest drop since at least 1990, after forecasting net income growth of 5pc to 10pc, compared with a previous prediction of 20pc, for 2011. The company reported second-quarter earnings before interest and taxes that were way below market expectations.
The new shares of Deutsche Boerse, the operator of the Frankfurt exchange, and London Stock Exchange Group fell 5pc and 2.8pc respectively, after French Premier Nicolas Sarkozy said France and Germany would propose a financial-transaction tax in September.