Business World

Sunday 22 April 2018

Jitters persist in Europe with Greek crisis unresolved


John Mulligan

It was a mixed performance by stock markets yesterday in Europe, even as near-term fears of a meltdown were calmed after the EU promised to pump billions more euros into Greece's coffers in return for more austerity measures.

By yesterday, European stocks had suffered the longest straight run of weekly losses -- eight of them -- since 1998.

And the effort to save Greece from slipping into the precipice is far from over yet. Crucial votes by the Greek parliament next week to approve the cuts will be nail-biters for investors and markets will remain nervous until then.

Market jitters persisted throughout yesterday, even despite unexpectedly welcome news from Germany. Its Ifo business sentiment survey for June rose to 114.5 from 114.2 in June. In the US, orders for durable goods climbed 1.9pc in May having fallen 2.7pc in April.

Neither bits of news were sufficient to stem further losses across most main markets, however, while the euro also slipped against the dollar on fears that the Greeks won't be able to pass the fresh austerity measures.

"The market is still waiting for Greece's austerity measures next week and nobody is willing to heavily invest in equities right now," said Robert Halver, head of research at Baader Bank in Frankfurt.

The ISEQ Overall Index barely managed to eke out a path to positive territory yesterday, ending the session 8.35 points, or 0.29pc higher, at 2,882.57.

Mining firm Kenmare Resources was one of the main winners for the day, climbing 6.4pc, or 3.9c, to 64.5c, giving it a market capitalisation of €1.55bn. The share price of the ilmenite producer has more than tripled in the past year.

Aer Lingus added 2.86pc, or 2c, to close at 72c. Ryanair had gained as much as 1.5pc earlier, but closed up 0.5pc higher at €3.62. Oil prices eased over growth concerns.

Losers included Bank of Ireland, which yielded 4.9pc, or 0.6c, to 11.6c. The bank is fighting to stay out of state control after a bulk of bondholders opted to take shares in the bank rather than accept deep cash discounts on their holdings.

National benchmark indices declined in nine of the 16 western European markets open yesterday, Germany's DAX Index slipped 0.4pc while the UK's FTSE-100 Index gained 0.4pc.

UniCredit, the only Italian bank facing stress tests that hasn't announced plans to sell new shares, lost 5.5pc to €1.36. Intesa Sanpaolo, Italy's second-biggest lender by assets, fell 4.3pc to €1.71.

Irish Independent

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