ISE hit by speculation on funding for banks

“Will they or won’t they” speculation over whether the main banks will recapitalise led to dramatic falls in the sector today. Overall, financials declined by over 11 per cent, leading the Irish market to close down by 116.48 points, or -4.5 per cent, at 2,454.10.

Anglo Irish Bank became the second Irish bank to fall before the €1 level this week when it fell sharply to its lowest level in over a decade. It dropped 25.1 per cent, or 28 cent, to hit €0.83.

Both AIB and Bank of Ireland were placed on review for downgrade by rating agency Moody’s, which meant that AIB also declined significantly, giving up 17.7 per cent, or 47 cent, to drop back to €2.18.

Bank of Ireland moved off its 16-year low from yesterday’s close to rally strongly, in a day of heavy trading in the stock. It closed up by 10 cent, or 12.2 per cent, to climb back to €0.93.

Irish Life & Permanent meanwhile remained somewhat consistent, falling back slightly by 6 cent, or 3.8 per cent, to €1.50.

Following revised earnings downgrades from the two other financial stocks on the ISE, IFG and FBD, both stocks declined today. FBD was one of the worst performers on the Irish market, decreasing by €2.85, or 25.1 per cent, to hit €8.50, while IFG gave up 12 cent, or 14.6 per cent, to slip back to €0.70.

On a brighter note, food group Glanbia revealed in its interim management statement that it was trading in line with expectations, although there was still a sell-off in the stock. It dropped back by 15 cent, or 6.1 per cent, to €2.24.

CRH has been particularly strong of late, but it too suffered today, falling back by 88 cent, or 5.0 per cent, to fall below €17.00 at €16.76.

Kingspan revealed that finance director Dermot Mulvihill sold 200,000 shares in the building group at €3.25 on Monday. The stock closed down by 15 cent, or 4.5 per cent, at €3.13.

In the US, better than estimated earnings at Hewlett-Packard and Home Depot lifted the market. By 11.42 am, the S&P 500 had climbed by 1.2 per cent to 860.62, while the Dow Jones Industrial Average gained 137.47 points, or 1.7 per cent, to reach 8,411.05.

Across Europe, stocks rose, buoyed by higher oil prices which lifted energy producers and better-than-expected earnings from US companies.The Dow Jones Stoxx 600 Index added 0.8 per cent to climb to 201.91, while markets in nine of the 18 western European countries increased.

In London, the FTSE 100 advanced by 1.5 per cent to climb to 4,192.79. In France the CAC 40 gained 1.1 per cent, while Germany’s DAX added 0.5 per cent.