ISEQ boosted by recovering equity market and optimism about banks
Ireland's stock market was among the beneficiaries of a strongly recovering equity market yesterday as optimism that banks can avoid the worst effects of a Greek default bolstered share prices.
The ISEQ was up 1.1pc at 2,590, as a range of leading shares were lifted by the rare bout of optimism. While leading stocks to benefit included the likes of CRH and Ryanair, it was a much smaller stock, Petroceltic, that stole the show, with a 20pc rise in its value.
While exploration stocks are traditional volatile, many of them have been performing well recently, as oil prices remain buoyant and new discoveries are made.
The shares soared to 7.2 cent after the Dublin-based explorer said a new well had produced far more gas than expected and management had agreed a new credit line.
The company has disappointed investors with poor results from two other fields this year amid worries that it did not have enough cash to complete its drilling programme ahead of a payment due soon to Italian oil company Enel.
Yesterday, it said its AT-8 well in Algeria was producing twice as much gas as originally forecast and could account for a sixth of all the gas that Petroceltic hoped to produce.
The results exceeded the company's first well in northern Algeria and "further confirm the high deliverability achievable" in this field, chief executive Brian O Cathain said.
The key share -- as ever -- on the Dublin market was CRH, which makes up about one-third of the entire value of the ISEQ. It was up 3.49pc to €13.195, as reports circulated that the US will in fact avoid a recession.
A string of stronger-than-projected statistics -- capped by the news last Friday of a 103,000 rise in payrolls last month -- prompted economists at Goldman Sachs Group to raise their growth forecasts for third-quarter growth to 2.5pc from about 2pc. That's nearly double the second quarter's 1.3pc rate and would be the fastest growth in a year.
"The US economy doesn't look like it's double-dipping at all," said Allen Sinai, president of Decision Economics Inc in New York. "But it is a crummy recovery."
Ryanair was also boosted, with the shares rising 1.72pc to €3.20. While splits in Europe remain deep, any suggestions that the eurozone debt crisis could get solved is likely to even boost consumer-orientated stocks like Ryanair.