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Stocks rally while yield on bonds fall

Irish stocks climbed while yields on Irish bonds fell to their lowest levels since 2006 as it became clear that European finance ministers will say today that they have reached a deal on extending repayments on half of Ireland's bailout debts by seven years.

The benchmark ISEQ advanced to 21.93 points, or 0.6pc, to close at 3,915.34 with transport stocks enjoying a good day.

Ryanair jumped 1.5pc to €6.08, Aer Lingus gained 0.7pc to €1.41, while Irish Continental Group closed up 3.5pc at €20.50.

Glanbia closed at a record high of €9.65, continuing its strong run of late.

Among the decliners were Fyffes, which closed down 4.9pc at 66.1 cents following publication of the fruit exporters' annual report.

But the real action was elsewhere. Ireland's nine-year government bonds advanced for a ninth day, pushing the yield to the lowest since December 2006.

"Ireland should get an extension of debt interest payments given the progress it's made," said Nick Stamenkovic, a strategist at RIA Capital Markets in Edinburgh. "Portugal is a bit up in the air because of the constitutional decision."

Irish nine-year bond yields dropped two basis points, or 0.02 of a percentage point, to 3.89pc.

Gain

Elsewhere in Europe, the benchmark Stoxx Europe 600 Index posted the biggest four-day gain since early January, as a report showed US unemployment claims fell more than forecast.

The benchmark measure has rallied 2.7pc this week, erasing its losses this month. The Stoxx 600 has climbed 5.5pc so far this year as US lawmakers agreed on a compromise budget and data on housing and jobs fuelled optimism the world's biggest economy is recovering.

"We've clearly got the equity markets underpinned by the continuation of quantitative easing in the States and the aggressive easing of monetary policy in Japan," said Bob Parker of Credit Suisse Asset Management in London. "If we do have a correction it's going to be very minor indeed."

National benchmark indices climbed in all of the 18 western European markets except Portugal. The UK's FTSE 100 Index rose 0.5pc, while France's CAC 40 Index jumped 0.9pc and Germany's DAX Index gained 0.8pc. In New York, the Dow Jones and S&P 500 hit intra-day record highs.

US initial jobless claims dropped by 42,000 to 346,000 in the week ended April 6, from a revised 388,000 in the previous week, figures showed.

Marks & Spencer rose 4.3pc, its biggest gain since March 18. The UK's largest clothing retailer reported faster sales growth than analysts projected. Food revenue at UK stores open at least a year climbed 4pc in the 13 weeks ended March 30.

Irish Independent