Thursday 14 November 2019

Irish shares surge on back of positive news from US


Peter Flanagan

IRISH shares surged back yesterday, posting the biggest one-day percentage gain in more than a year, as positive economic data in the US and optimism that another round of stimulus could be implemented there boosted sentiment.

By the close of trading, the ISEQ Overall Index had risen 3.67pc, or 91.16 points, to 2,576.81. That was its highest close since the start of August and the biggest one-day gain in percentage terms for the index since May 2010.

Traders were boosted by the release of minutes from the last meeting of the governors of the US Federal Reserve, which they took to indicate the Fed would look at launching another round of stimulus for the US economy, even if it did not mean a full-blown round of quantitative easing.

Strong business activity and factory orders were also taken as good indicators of the health of the US economy. The talk of stimulus in America was inevitably a boon to CRH, which jumped some 5.7pc to €12.43.

The construction company earns around half of its profits in the US. A gain of that size by CRH usually ensures the ISEQ will close on the up and yesterday was no different.

The index was, however, boosted by strong results from Aer Lingus, which reported a first-half loss but said profits had almost trebled in the second quarter of the year, leading to optimism about future growth. The national carrier climbed 9.32pc to 65c.

Packaging company Smurfit Kappa surged 10.45pc to €5.52, while clinical research group Icon added 11.11pc to close at €15 a day after Bristol-Myers Squibb had chosen it as a preferred provider of clinical trials.

Few stocks fell on the day, although Merrion Pharmaceuticals was a big loser, slumping some 21.35pc to 70c.

Elsewhere, European stocks gained for a third day as national benchmark indices gained in all of the 18 western European markets, except Greece and Iceland.

France's CAC 40 advanced 3.1pc, the UK's FTSE 100 rose 2.4pc and Germany's DAX added 2.5pc. The Stoxx Europe 600 Index advanced 2.9pc.

"The Fed's minutes were taken as a good signal because the majority agreed and the Fed said it has tools that it hasn't yet used," said Arnaud Scarpaci, a fund manager at Agilis Gestion in Paris.

"Everyone thinks the Fed will put some sort of buying programme into action to help the economy."

In London, Bwin.Party Digital soared 14pc after reporting first-half earnings before interest, taxes, depreciation and amortisation that beat analysts' estimates.

Tesco advanced 3.8pc. Britain's largest retailer plans to sell its 129-store Japanese unit because it cannot build a "sufficiently scalable business" in the country eight years after entering the market.

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