Five-year high as Fed delays taper
IRISH and European stocks rose to the highest level in more than five years as the Federal Reserve unexpectedly decided against slowing the pace of its monthly bond purchases.
The ISEQ surged in morning trade before slowly retreating in the afternoon. Still, the benchmark closed 20.37 points, or 0.5pc, at 4,292.54 points in Dublin.
A broad swathe of shares advanced, although food companies such as Glanbia and Origin had a particularly good day along with building materials companies such as CRH and Kingspan.
Volumes were also much higher than normal here in Ireland and overseas. Origin advanced 4.2pc to €6.57 while Glanbia was up 2.5pc to close at €10.07. Kingspan was up 2.7pc at €12.46 and CRH closed 2.3pc higher at €18.13.
Bank of Ireland also had a good day, finishing the session up 3.9pc at 22.5 cents. A gauge of European lenders increased 0.8pc, extending its rally since a June 24 low to 20pc. Aer Lingus advanced 2.3pc at €1.58.
National benchmark indexes gained in 16 of the 18 western European markets. Germany's DAX rose 0.6pc, extending a record. The UK's FTSE 100 added 0.9pc and France's CAC 40 climbed 0.7pc.
The Stoxx Europe 600 Index gained 0.5pc to close at 314.81, the highest level since June 2008, after earlier rising as much as 1.2pc. The equity benchmark has risen 5.9pc so far this month, extending its advance this year to 13pc, as central banks around the world pledged to maintain stimulus measures to support the global economy.
"I'm a bit surprised by the Fed's decision to postpone tapering," said Pierre Mouton, who helps oversee $6bn (€4.4bn) as a portfolio manager at Notz, Stucki in Geneva.
On Wednesday evening, the Fed refrained from reducing its $85bn of monthly bond purchases, saying it needs to see more indications that the US economy is improving sustainably.
Economists surveyed by Bloomberg before the decision had predicted that the central bank would start tapering stimulus measures this month.