Dublin and European markets rally

Dublin rallied along with key European markets today as investors responded to news that President Barack Obama is set to unveil an economic recovery plan and a German court’s ruling in favour of the country’s participation in euro zone bailout schemes.

The Iseq index of Irish shares closed up 2.9 per cent at 2519.42, a performance that was broadly in line with other European markets today.

The Dow Jones Stoxx 600, which tracks leading stocks in 18 western European markets, was up 3.1 per cent at 228.84 ahead of the close of business.

In London, the benchmark FTSE 100 advanced by more than 3 per cent to close at 5318.19.

While the good news gave investors some grounds for optimism and saw them veer to equities from safe havens such as gold, which shed 3 per cent, traders in Dublin said that markets were still nervous.

They also pointed out that the volumes of shares traded today were light. “You prefer to see bigger volumes on the good days,” said one Dublin trader. “We’ve tended to have light volumes on the good days and the bigger volumes on the bad days,” he added.

News that Mr Obama is set to spend up $300 million (€213,000) on his economic programme boosted the Dublin market’s biggest stock, CRH, which draws half its revenues from supplying the US construction industry.

The building materials group gained more than 5.3 per cent to close at €11.91.

News that the Government would considering the sale of its 25 per cent stake in airline, Aer Lingus, gave its shares a 6.3 per cent lift.

The one-time flag carrier closed at 67.5 cent after Minister for Transport Leo Varadkar said the Coalition would consider selling the stake.

In the same sector, low-cost carrier, Ryanair, which owns almost 30 per cent of Aer Lingus, rose 4.3 per cent to close at €3.099. Ryanair’s price rose on the back of positive news from one of its rivals, Easyjet.

Food group Glanbia also outperformed the market, gaining 5.95 per cent to close at €4.651.

DIY and builders’ merchant, Grafton was another significant mover, adding 6.67 per cent to end the day at €2.88.