Baltimore Technologies may yet retain its FTSE-100 status after the share continued its strong recovery as international stock markets bounded ahead on the back of positive US employment and earnings figures. But although Baltimore rose 13.5 per cent yesterday to close on £5.81 sterling, and has risen more than 85 per cent since it hit a £3.13 low on May 20th, analysts believe it still has some way to go before it retains its FTSE-100 listing.
At last night's close, Baltimore's market capitalisation puts it around 120th in the market pecking order - still some way short of retaining its position.
Yesterday's rise by Baltimore and most of the other Irish technology shares was driven by the positive employment and earnings figures from the US, which suggest that further interest rate rises by the Federal Reserve are now unlikely.
The Fed, which meets later this month, has already raised interest rates six times since June 1999 in a bid to keep inflation out of the fast-growing US economy. Analysts said the latest jobs and earnings figures suggest the Fed has been successful in keeping a lid on inflation.
Stock markets rejoiced after the US Labour Department's report that non-farm payroll employment rose 231,000 in May but the unemployment rate increased to 4.1 per cent, indicating that wage cost pressures were easing.
"The market really liked the numbers," said Mr Doug Myers, vice-president of equity trading at Wachovia Securities. "It means the economy is slowing down. The Fed's actions are doing what they were supposed to do. The cost of borrowing does not need to continue going up."
Technology and telecoms stocks led the advances in Europe, underpinned by the recovery in the Nasdaq, which has rebounded 18 per cent this week after closing at a six-month low of 3,205 points on May 26th.
Stocks have been boosted by hopes that "new economy" growth stocks in the United States would not have to contend with higher interest rates and inflation.
"Higher interest rates always make TMT valuations look more stretched than others. And these economic data have really helped Nasdaq futures; that's what's behind these gains," said Deutsche Bank analyst Mr Alex Newman.
In New York, stocks - especially technology stocks - roared ahead and the technology-heavy Nasdaq Composite Index opened almost 6 per cent higher. It eventually closed up 230.85 on 3,813.35. The Dow Jones index of the leading 30 shares was up +142.56 on 10,794.76.
Apart from Baltimore, other Irish technology stocks made strong gains. In London, market newcomer Parthus dealt up 19 1/2p to a new closing high of £2.13 sterling. This compares with a flotation price two weeks ago of just 86p. On the Neuer Markt, Trintech - which has suffered badly from negative sentiment to the sector in recent weeks, jumped €3.85 to €25.10.
Later on Nasdaq, Parthus and Trintech continued to improve and by midday Trintech was up over 21 per cent and Parthus 17 per cent. Other technology shares such as Iona and Riverdeep were also much firmer.
But while telecom shares managed to notch up sizeable gains, the KPN/Telia factor continued to dog Eircom, which closed down three cents on €3.10 after earlier hitting a low of €3.00.
