Saturday 24 February 2018

Irish stocks soar on US GDP growth

A trader works on the floor of the New York Stock Exchange. Photo: Reuters
A trader works on the floor of the New York Stock Exchange. Photo: Reuters
Peter Flanagan

Peter Flanagan

IRISH shares rose sharply yesterday, as markets around Europe were cheered by strong economic data in the US.

By the close in Dublin the ISEQ Overall Index had added 0.9pc, or 29.6 points, to close at 3,298.53.

More than twice as many stocks climbed as fell during the session, which saw shares bump along before exploding once the US GDP figures were released.

The US economy grew by 2.7pc during the third quarter, well ahead of forecasts, while talks also seemed to be progressing on avoiding the "fiscal cliff" there which will see a number of tax increases and spending cuts come in automatically if lawmakers can't agree on how to move forward.

In Dublin, stocks gained across a broad swathe of the market.

Kenmare Resources rebounded from a tough week to jump 5.5pc to 41c, but the biggest gainer in percentage terms was Conroy Gold, which more than doubled in value during Wednesday. The conglomerate DCC added 3.9pc, while Aer Lingus gained 1.9pc.

Elsewhere, national benchmark indexes advanced in every western European market except Greece. The UK's FTSE 100 climbed 1.2pc, France's CAC 40 gained 1.4pc and Germany's DAX added 0.8pc. The composite Stoxx Europe 600 Index jumped 1.1pc to its highest level in 17 months.

"President Obama is on strong ground, having defeated his Republican challenger, and the House Speaker is sounding conciliatory too," said Manish Singh, head of investment at Crossbridge Capital in London. "A deal is a certainty. News on the fiscal cliff has been incrementally positive, so investors are increasingly optimistic too."

Rio Tinto jumped 5pc after saying it will cut $5bn (€3.75bn) from operating and support costs next year.

The mining company also said that it will increase production at its iron ore, copper and alumina units.

Invensys soared 9.1pc. The maker of software for London Underground trains will probably be acquired after completing the sale of its rail-signalling division to Siemens, RBC said.

Zurich Insurance Group gained 2.5pc after chief executive Martin Senn promised investors an "attractive and sustainable dividend".

Volkswagen added 1.5pc to its highest price in 20 years, after Europe's largest carmaker said it will extend its partnership with China's FAW Group beyond 2016, when the existing contract expires. The new joint venture will run for an additional 25 years. Both companies concluded that neither side has infringed on technology patents, Volkswagen said.

Banco Popular Espanol climbed 4.5pc after saying it completed a €2.5bn share sale to help cover a capital shortfall uncovered by stress tests of Spanish banks.

Irish Independent

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