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ISEQ hits six-week high as CRH soars


Bank of Ireland: up 5.5pc to 62c. Photo: Bloomberg News

Bank of Ireland: up 5.5pc to 62c. Photo: Bloomberg News

Bank of Ireland: up 5.5pc to 62c. Photo: Bloomberg News

IRISH shares rose to a six-week high as shares in CRH surged on hopes that the US Federal Reserve is to announce another round of asset purchases at its November meeting to bolster the economic recovery in the building material company's largest market.

Shares in CRH surged a massive 8.4pc in very late trading to close up one euro at €12.9 each.

The speed and scale of the move surprised the market. The shares were €12 each around midday and €12.65 each in the late afternoon. The volume of shares traded was unusually high.

CRH was up after heavy machinery maker Caterpiller announced a 96pc rise in profits for the third quarter, driven by strong sales in the US in particular. The impact on CRH was unusually but the gains were from a low base after the market had "over sold" CRH.

The ISEQ jumped 83.26 points, or 3.1pc, to 2748.3 points.

Other shares to post large gains included Bank of Ireland, which jumped 5.5pc to 62c after telling US investors they would have very little chance of taking successful legal actions against the bank in the US courts.

The warning followed legal advice from Arthur Cox. The bank issued a €300m bond guaranteed by the Irish Government in recent days.

Other risers included Greencore up 3.8pc to €1.15, and Aer Lingus which advanced 3.6pc to €1.14.

Irish bonds paced declines by so-called peripheral debt in the euro region after demand at a Spanish bond auction fell. The yield on Ireland's 10-year security jumped 21 basis points to 6.64pc, with the Portuguese 10-year yield 16 basis points higher at 5.94pc.

Stocks elsewhere in Europe also climbed, driving the Stoxx Europe 600 Index to its highest close in six months, after results from Nokia to Danone and Fiat topped estimates.

Nokia rallied the most since January as the world's biggest maker of mobile phones also raised its industry forecasts. Yogurt maker Danone climbed 4.8pc after third-quarter sales jumped 15pc. Fiat surged 4.4pc as the carmaker also raised its 2010 predictions.

Credit Suisse limited gains on the benchmark Stoxx 600 after the second-largest Swiss bank posted profit and trading revenue that missed analysts' projections.

"Generally the numbers are surprising positively and are being taken well by the market," said London-based Andrea Williams, who helps manage about $1.1bn at Royal London Asset Management.

National benchmark indexes increased in 14 of the 18 western European markets yesterday. The UK's FTSE 100 Index gained 0.5pc and Germany's DAX Index and France's CAC 40 Index 1.3pc.

Jameson whiskey owner Pernod-Ricard rallied 6.3pc after first-quarter sales growth beat estimates.

Irish Independent