Banking and mining shares rally
BANKING AND mining stocks led a low-volume rally on European stock markets yesterday, as hopes of central bank action to shore up the euro zone economy remained in place despite the European Central Bank resisting pressure to intervene in the short term.
Markets were briefly pared back as the ECB put the onus firmly on euro zone governments to solve their debt crises, dashing expectations that it would take action ahead of the Greek elections. But the major European stock markets finished up between 2 and 2.4 per cent.
“There’s a general feeling that the world isn’t going to end just yet, and we’ll get a few more weeks out of it,” said one Dublin-based equities dealer.
THE ISEQ index climbed 2.5 per cent, as most of the major stocks made gains. Bank of Ireland rose 8 per cent to 10 cent as financial stocks across Europe took part in a technical rally.
Titanium miner Kenmare also had a good day, advancing 7.8 per cent to 58 cent, while exploration group Dragon Oil launched a $200 million share buyback programme, which pushed it up 8 per cent to €6.48.
Grafton, owner of the DIY chain Atlantic Homecare, which was placed into examinership yesterday, closed flat at €2.75.
There were a few buyers circling the Iseq’s biggest stock, CRH, lifting the cement-maker up 7.2 per cent to €13.93, a rise of 94 cent. There was a certain amount of catch-up trading in the market as London re-opened after its extra jubilee bank holiday on Tuesday, but volumes were better rather than being great.
However, sentiment had improved, one dealer noted: “After a torrid May, there’s a few people putting their hand in their pocket in June.”
THE FTSE 100 blue chip index rose 2.4 per cent as UK stocks posted their biggest advance in six months.
A gauge of British banks rallied, as Barclays climbed 8.2 per cent to 187.80 pence and Lloyds Banking Group rose 5.2 per cent to 27.05 pence. The lender agreed to sell 809 million pounds ($1.25 billion) of Australian corporate real-estate loans to a Morgan Stanley and Blackstone Group LP joint venture for about £388 million in cash.
Man Group, the world’s biggest publicly traded hedge fund manager, advanced 7.1 per cent to 80.9 pence, as Citigroup raised its recommendation on the stock to buy from neutral.