Sunday 19 November 2017

Shares rise as ECB keeps stimulus

Bank of Ireland posted a small gain. Photo: Bloomberg News
Bank of Ireland posted a small gain. Photo: Bloomberg News
Peter Flanagan

Peter Flanagan

IRISH shares rose again yesterday, picking up where they had left off on Wednesday, after confirmation that the ECB would hold off removing stimulus combined with strong data from the US to buoy the market.

By the closing bell the ISEQ Overall Index was up 2.12pc, or 57.3 points, at 2,751.96. The market was led by CRH, which surged 7.38pc to €14.85 on the back of positive existing home sales in the US while a broader trend in unemployment there pointed to a healing job market. CRH conducts a huge proportion of its business in North America.

CRH led a rise across construction stocks, with Kingspan adding 3.03pc to close at €6.40.

Food stocks also had a strong day, with rising food prices likely to be reflected at the shops eventually. Glanbia jumped 4.62pc on the back of strong milk powder pricing in New Zealand -- usually a good indicator of future prices. Greencore added 2.46pc to close at €1.46 while Kerry Group rose 0.5pc to €24.80.

The banks had a decent day, with Bank of Ireland and Irish Life & Permanent posting small gains. Allied Irish Banks finished marginally in the red, however.


A small number of stocks ended the day down, with financial software company Norkom losing 9.45pc to close at €1.15 while CPL Recruitment slipped 5.42pc to €2.27. Worldspreads tumbled 10.81pc to 66c.

The strong gains in Dublin were reflected across Europe, with national benchmark indexes rising in 17 of the 18 western European markets. The UK's FTSE 100 jumped 2.2pc, France's CAC gained 2.1pc and Germany's DAX advanced 1.3pc. The Stoxx 600 gained 1.7pc.

"The ECB's decision to delay the withdrawal of the emergency liquidity measures is clearly positive for stocks," said Henrik Lundin, chief strategist at Nordea Bank. "The ECB has been too hawkish given the risk of an extended debt crisis and this step is definitely a leap in the right direction."

The ECB also bought more government bonds as its president, Jean-Claude Trichet, pledged to fight "acute" financial market tensions.

In London, BHP Billiton advanced 3.7pc in London as copper prices rose to the highest in almost three weeks. Rio Tinto Group, the world's third-biggest mining company, climbed 4.9pc. Xstrata increased 2.6pc.

Desire Petroleum soared 24pc after the energy explorer said its Rachel North well off the Falkland Islands made the second discovery in the region this year.

Rockhopper Exploration made the first potentially commercial find around the South American islands in May. The stock also advanced, climbing 6.7pc.

Irish Independent

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