Euro shares up as interest rates stay low

Ryanair, Bank of Ireland and Paddy Power drag Dublin market into negative territory

European shares rose to a one-month high on Friday after making their biggest weekly gain since January as mining stocks gained and hopes grew that interest rates would stay low for longer.

The pan-European FTSEurofirst 300 index rose up 4.4 per cent this week, with investors – reassured by more stable commodities prices – buying equities despite a string of weak economic data. The index ended up 0.36 per cent on Friday.

The Bank of England on Thursday gave no sign it was close to raising rates, and minutes of the most recent Federal Reserve meeting showed it decided to wait for evidence that the global slowdown would not knock a US recovery off course.


The Iseq lagged its European peers, closing down 0.6 per cent at 6,136. It was pulled into negative territory by the performance of several notable heavyweights, including



, which ended the day 1 per cent down at €12.55.

Airline stocks found themselves under pressure this week in the wake of a negative brokers' note and weak traffic numbers from Lufthansa.

Bank of Ireland was marginally weaker at €0.34 with about 50 million shares traded.

Building materials group CRH fell nearly 1 per cent to €23.76, while remaining flat in London, on back of a weaker euro.

Bookmaker Paddy Power also fell around 3 per cent to €98.58 in line with its proposed merger partner Betfair.

Drinks group C&C traded up 1 per cent at €3.65.


Britain’s top share index posted its biggest weekly gain since 2011 on Friday, as minutes of a Federal Reserve meeting suggested it was not about to raise interest rates, and mining stocks rallied after


cut back zinc production.

Britain’s FTSE index was up 41.34 points, or 0.7 per cent, at 6,416.16 points at the close, up 4.7 per cent for the week, setting its biggest weekly gain since December 2011.

Glencore was among the top gainers, rising 7 per cent after it said it would cut 500,000 tonnes of zinc production, or around 4 per cent of global supply, in its latest move to counter weak commodities prices.

Glencore, the world’s largest producer of zinc, has already taken measures aimed at cutting its $30 billion debt pile by a third. The volatile stock finished the week up 35.9 per cent since Monday, its biggest weekly rise ever.

Sports Direct was down 6.6 per cent. It extended losses after the British Insolvency Service said that criminal proceedings had been opened against its chief executive.


Ordinary shares in Volkswagen climbed 8.4 per cent, outperforming the preferential shares, which rose 3 per cent. The STOXX


600 Auto index continued its recent rally and was close to wiping out all losses suffered after it emerged VW had rigged emissions tests.

Shares in Givaudan rose 4.4 per cent after the Swiss flavours and fragrance maker maintained its financial targets for the five years ending 2015.


Wall Street opened slightly higher on Friday, keeping the S&P 500 on track for its best week this year, as investors bet the Federal Reserve would not move interest rates off near-zero levels this year.

The minutes of the Fed’s September meeting, released on Thursday, indicated further signs of dovishness, with policymakers concerned about a global economic slowdown weighing on America, even before weak September jobs data.

Freeport-McMoRan was up 5.4 per cent, while Newmont Mining rose 4.2 per cent.

Alcoa’s shares were down nearly 2 per cent at $10.80 after it reported disappointing results.

Tesla fell 2.7 per cent to $220.61 after Barclays cut its rating on the electric car maker's stock to "underweight".

Gap fell 6.7 per cent to $26.96 after reporting a bigger-than-expected fall in September same-store sales.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times