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ISEQ jumps on ECB speculation

IRISH shares bounded ahead, posting their biggest percentage gain in more than a year amid speculation that the European Central Bank may cut interest rates to stimulate demand and on strong European earnings.

By the close in Dublin, the ISEQ Overall Index was up 2.63pc, or 101 points, to close at 3930.6.

Only three of its 45 listed companies saw their share price fall, 27 were up while five were static. The ECB is now considered more likely to cut interest rates next week after poor manufacturing data from China and the US.

Datalex was the biggest gainer of the day, up 6.3pc to 85c. Banks did well too: AIB rose 6.1pc to 7c and Bank of Ireland grew 3pc to 17c.

Building materials supplier CRH was up by 5.6pc to €16.22. Figures show that contract awards for US highways were up 12pc in March compared to a year earlier, a fifth consecutive month of double-digit growth. Half of CRH's sales come from the US.

Elan also continued its upward trajectory after its board rejected a takeover bid by Royal Pharma on Monday, saying it undervalued the company. The drugs manufacturer climbed 4pc to €9.64.

The only laggards yesterday were mining companies. Petroneft slumped 2.3pc to 4c and Kenmare fell by 1.3pc to 31c. Petroceltic was down 1.3pc to 8c. The oil and gas explorer announced 2012 pre-tax losses of $6.7m (€5.2m) this week, down from an $8.2m deficit a year earlier.

Speculation about ECB action had a similar effect elsewhere as European stocks jumped their most in eight months.

National benchmark indices climbed in all 18 western European markets, except Greece. The UK's FTSE 100 increased 2pc and Germany's DAX rallied 2pc. France's CAC 40 jumped 3.6pc, its biggest gain since August. The composite Stoxx Europe 600 Index soared 2.4pc, its biggest jump since last August.

The benchmark measure has still retreated 2pc from this year's March high as Chinese economic data missed forecasts and Cyprus reignited concerns about the euro-area debt crisis.

ARM, the designer of chips for Apple iPhones, soared to a 13-year high on better-than-forecast sales.

In the US, markets experienced a momentary freefall when the Associated Press tweeted reports of explosions at the White House and an injured President Barack Obama, but recovered when the tweet was quickly identified as a hack.

"We saw a huge dip in the futures, immediately starting as headlines went out that the AP Twitter feed was reporting on the White House incident," says Dave Lutz of US firm Stifel Nicolaus. "That spread quickly but we advised clients there was no confirmation from the White House or any of the other news outlets."

Irish Independent