Iseq rebounds despite loss of coveted AAA credit rating

DUBLIN REPORT: Iseq: 2,193.95 (+64.60) Settlement date: April 3rd

THE ISEQ index rebounded yesterday in line with international markets, despite the fact that Ireland lost its coveted AAA credit rating from Standard & Poor’s on Monday.

According to brokers, the downgrading was largely expected by markets.

“It’s been on the cards a while. I don’t think international investors were surprised by the news,” one broker said. The Iseq bounced more than 3 per cent as “a little bit of money came back into the market”, he added.

Index heavyweight CRHwas one of the main contributors to this bounce. Although the cement giant came off a high of €16.46 just before the end of the session, it still closed up 27 cent at just under €16.22.

Elsewhere, financial stocks managed to regain much of the ground lost during Monday's sell-off. Bank of Irelandmarked up by 14 per cent to 52 cent, AIBgained 8.5 per cent to close at 60 cent, while Irish Life & Permanentadded 10 per cent to finish the session at €1.10.

The Iseq index's second largest component, no-frills airline Ryanairticked up by almost 10 cent to just below €2.90 as buyers came back into the market.

Food stocks enjoyed another positive day's trading, with Kerry Groupclosing up almost 6 per cent at €15.25 and Arzytajumping 48 cent to €17.61. Cider manufacturer C&Cclimbed more than 10 per cent to €1.30.

Brokers observed that the Iseq remains at the mercy of international markets, which will be paying close attention to the “huge amount” of macro-economic news yet to come out this week, including the European Central Bank’s interest rate decision tomorrow.

“Ireland is like a cork bobbing around on stormy international waters at the moment,” one broker remarked.