European banking merger-mania continued to drive financial shares higher, with the planned mergers in Italy triggering heavy international buying of the two main Irish banking stocks. The banks' surge left the ISEQ Overall within 42 points of a new high, although the anaemic performance in New York and major European markets suggests it may not reach this landmark today.
The enthusiastic report on the banks and on Bank of Ireland, in particular, by Morgan Stanley Dean Witter, is still a major factor driving the shares and BoI dealt up as high as €20.40 (£16.07) before closing up 80 cents on the day on €20.20 (£15.91). This leaves its shares just 60 cents off the recent €21.00 (£15.75).
AIB was less active but rose steadily throughout the day until a spurt of late trading saw the share close on €16.15, a gain of 60 cents. Other financials were very quiet with the stock shortage caused by the acceptances to the Irish Permanent offer, meaning that the market is starved of Irish Life shares.
Industrials were generally quiet, but spurred by speculation that another $50 a tonne increase in the linerboard price may be implemented during the summer, Smurfit jumped another 7 cents to €2.04 (£1.61). Ardagh continued to gain after the Rockware deal and added another 10 cents to €2.60 (£2.05) and is trading 95 cents higher than the preRockware price. CRH was unchanged on €2.30 (£12.84). Fyffes was also unchanged on €2.20 (£1.73) as the group disclosed it had bought back another 250,000 shares at €2.20 and €2.22. This brings shares bought back recently to 1.2 million at prices between €2.28 and €2.20.
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