Bank of Ireland up 2.5% ahead of organisational restructure
Quiet day for markets generally but US stocks rise on positive jobs news
While stocks advanced on the perceived economic strength, the dollar and treasury markets focused on the implications for the Fed’s next rate hike
Wall Street stocks rose on Friday along with the US dollar and treasury yields after data showed stronger-than-expected jobs growth, but wage increases missed forecasts.
The Iseq Index finished up about .35 per cent, which was in line with international markets.
Among the main movers was Ryanair, which recovered to €18.45, representing a rise of 1.8 per cent. AIB was up about 1 per cent on the day, closing at €5.01. C&C lost a bit of ground, finishing the day down 1 per cent.
Bank of Ireland was up 2.5 per cent to close at 24.6 cents. “It was a good couple of days for Bank of Ireland as they are changing their organisational structure somewhat on Monday and will be trading under a new code,” said an analyst with Davy.
In terms of negative territory, Kerry Group was a little weaker, which was down 1.1 per cent. Kingspan was also down just over 1 per cent.
On property companies, Green Reit and Ires Reit were down about 1 per cent, while Hibernia Reit finished the day flat.
“There were a few bits and pieces going on but it wasn’t massively busy today,” said the Davy analyst.
Falls in energy and bank stocks dampened an otherwise positive week for Britain’s top share index, while changes in broker recommendations prompted moves in easyJet, WPP and Royal Mail.
Britain’s blue chip FTSE 100 index ended the day up 0.2 per cent at 7,350.92 points, reversing earlier losses after weak housing data drove sterling to a nine-day low, helping the index’s dollar earners.
Financials were weaker, with HSBC and Barclays both in negative territory, cooling after the sector hit its highest level since the end of February in the previous session on expectations of higher interest rates.
Supporting the index, shares in easyJet rose 5.3 per cent after Credit Suisse upgraded the budget airline to “outperform” on the back of an improvement in summer trading.
Utility Centrica was among biggest gainers, up 2.8 per cent on takeover rumours, although analysts at Jefferies were sceptical.
Euro zone government bond yields edged higher, adding to heavy losses earlier in the week as investors reassess the outlook for fixed income on perceptions that an era of ultra-cheap money is gradually ending.
Euro zone growth is picking up but underlying inflation is still weak, so the European Central Bank should adjust its policy carefully and flexibly to avoid abrupt market moves, ECB board member Benoit Coeure told two European newspapers.
Euro zone bond yields, which jumped as much as 12 basis points on Thursday as minutes from the ECB’s latest meeting showed policymakers are open to a further step towards reducing monetary stimulus, rose 1-2 basis points on Friday.
Germany’s benchmark 10-year Bund yield edged up to 0.58 per cent, a fresh 18-month high. Low-rated Italian, Spanish and Portuguese government bond yields, seen as particularly vulnerable to unwinding of extraordinary stimulus, were particularly hard hit, rising 5-8 bps.
US stocks rose with the dollar, while treasuries fell after unexpectedly strong hiring data bolstered confidence in the American economy and bolstered the Federal Reserve’s case for raising interest rates.
Crude fell below $45 a barrel. Broad-based payroll gains that topped estimates boosted sentiment among equity investors a day after stocks suffered the biggest drop in six weeks.
The Bloomberg Dollar Spot Index briefly erased gains as tepid wage growth stoked concern that inflationary pressure remains weak as the Federal Reserve signals its intent to tighten monetary policy.
The 10-year treasury yield climbed to 2.39 per cent. Gold futures turned lower. The hiring report supported the Federal Reserve’s stance that recent signs of labour market sluggishness are transitory, though the tepid wage gains gave fuel to arguments that weakness remains.
While stocks advanced on the perceived economic strength, the dollar and treasury markets focused on the implications for the Fed’s next rate hike.
Bond yields have climbed around the world after a sell-off in debt this week stoked by a number of central banks stepping up talk of tighter policy conditions.
(Additional reporting: Agencies)