CRH, Bank of Ireland stand out as equities climb

Dollar continues to advance in European trading

CRH, which generates about 40%  of its profits in the US, advancing 1.3%

CRH, which generates about 40% of its profits in the US, advancing 1.3%

 

CRH and Bank of Ireland stood out as strong spots on a buoyant Iseq index on Thursday as European stocks moved higher as the US Federal Reserve’s rate hike and projection of three further increases next year underscored confidence in the world’s largest economy.

The Iseq index rose by as much as 1 per cent in early trading in Dublin to 6,424 points, with CRH, which generates about 40 per cent of its profits in the US, advancing 1.3 per cent.

Bank of Ireland gained 1 per cent. The bank’s earnings stand to be boosted by an environment of rising bond yields as US rates increase, while bond movements will also help narrow its pension deficit which almost doubled in the first nine months of the year to €1.45 billion.

Elsewhere, the pan-European Stoxx Europe 600 index advanced 0.4 per cent, while the dollar rose against most other currencies, reaching $1.0468 in European trading against the euro, compared to $1.064 immediately before the US rates announcement.

The market interest rate, or yield, on Ireland’s 10-year government bonds rose to 0.98 per cent from 0.87 per cent on Wednesday.

While Federal Reserve chair Janet Yellen said on Wednesday that it was too early to judge the impact of US president-elect Donal Trump’s planned expansionary budget plans, members of the rates-setting body “may have wanted to get ahead of the curve yesterday before a potentially large fiscal stimulus next year”, said David McNamara, an economist with Davy in Dublin.