Business World

Monday 23 October 2017

Dublin bucks weaker equity trend

A trader looks at his screen on the IG Group trading floor in London. The surprise decision by euro zone leaders to part-fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday, with shares and the bonds of struggling euro zone governments tumbling.
A trader looks at his screen on the IG Group trading floor in London. The surprise decision by euro zone leaders to part-fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday, with shares and the bonds of struggling euro zone governments tumbling.
Colm Kelpie

Colm Kelpie

IRISH shares bucked the trend yesterday and eased higher as European stocks retreated amid the fallout from the decision to impose losses on Cypriot depositors.

National benchmark indexes fell in most western-European markets that opened yesterday with the exception of Ireland and Iceland.

By the close in Dublin, the ISEQ Overall Index was up 1.48pc, or 57.13 points, to close the bank holiday trading day at 3,906.03. The Dublin Index rose steadily throughout the day as stocks tumbled across the world.

The leaders included Glanbia, which rose 4.9pc to finish at €8.66, while drinks giant C&C was up 4.1pc to €5.10.

Packaging giant Smurfit Kappa increased 2.3pc to €12.55, while Ryanair enjoyed a 2.1pc boost to close the day at €5.80.

On the other side of the board, the laggards included Aer Lingus which tumbled 4pc to finish at €1.34. Bookmakers Paddy Power slipped 0.8pc to €66.70, while oil and gas exploration company Providence Resources dipped 0.1pc to close at €7.

Elsewhere, European stocks retreated after the euro area forced Cyprus to adopt a levy on bank deposits, prompting concern that the region's debt crisis will reignite.

'Scary'

The UK's FTSE 100 and France's CAC 40 lost 0.5pc, while Germany's DAX declined 0.4pc. Luxembourg's LuxX Index dropped 2.2pc, its biggest slide in seven months.

While Cyprus accounts for less than half a per cent of the 17-nation euro-area's economy, the raid on bank accounts risks a resumption of the financial crisis that began in 2009 in Greece.

Moody's Investors Service said that the move limited support for bank creditors across Europe and showed that policy makers would risk disrupting financial markets to avoid sovereign defaults.

The Stoxx 600 retreated 0.2pc at the close of trading, paring a slide of as much as 1.2pc.

"This creates a precedent and is a bit scary today," Matthieu Giuliani, a fund manager at Palatine Asset Management in Paris, said.

"In the short term, it hurts the market. But this is a case specific to Cyprus. I don't see Germany or the EU imposing such a thing on Spain or Italy. It would create panic in the banking system."

UniCredit, Italy's largest lender, fell as banks posted the worst performance among the 19 industry groups on the Stoxx 600.

Mobile phone giant Ericsson posted its largest retreat in more than two months after agreeing to end its unprofitable chip venture with STMicroelectronics NV.

Natural resources company Eurasian Corp led a decline by commodity producers as metal prices slid.

Irish Independent

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