Strong gains by Eircom and AIB were the main reasons for a solid recovery by the Irish market yesterday and there are reasonable grounds to believe the market can consolidate on those gains.
Eircom's recovery over the past two days has been quite dramatic, but dealers believe that daily gains from here will be modest, punctuated by occasional profit-taking by small investors who missed out on the early surge in the share price and want to lock in some profits now. With domestic institutions back in the market for Eircom shares, any profit-taking should be easily absorbed. Eircom dealt up to a high yesterday of €4.16 before closing up 13 cents on the day at €4.14 (£3.36).
Financials were mixed with AIB up 26 cents on €11.20 (£8.82), Irish Life & Permanent up eight cents to €10.08 (£7.94), Bank of Ireland 9 1/2 cents lower on €8.06 (£6.35) and First Active five cents back on €2.50 (£1.97).
Among the industrials, the Ansbacher revelations had little if any effect on CRH, but the share was volatile, trading up to €19.15 before drifting lower later to close on €19 (£14.96), a fall of three cents on the day.
Elsewhere, Smurfit was one cent easier on €2.79 (£2.20). Smurfit's US associate, Smurfit Stone did not get any support from a bullish review from Warburg Dillon Read. The Warburg analysts described Smurfit Stone as its top sector pick, said its weakness was unwarranted and represented a buying opportunity and put a $32 price target for the share. Smurfit Stone was trading almost 75 cents lower on $21.81 at the Dublin close.
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