Bank stocks surge drives Iseq

All eyes were on banking stocks today as the market took stock of the disclosure by Minister for Finance Brian Lenihan yesterday of the price the National Asset Management Agency will pay for property-related loans.

The stock exchange had failed to register any dramatic changes yesterday as the announcement of the details of the Minister’s statement had been delayed.

Both Bank of Ireland and AIB surged as the market opened this morning, and their performance today pushed the Iseq index over 3 per cent higher to reach its highest point in almost a year.

There was huge volatility around banking stocks, particularly Bank of Ireland, as investors awaited the statement from the bank at noon.

Nonetheless, the bank saw the most action in terms of volume, with just under 40 million shares traded in Dublin. As with AIB, the share price surged towards the end of the day, with the stock closing 18 per cent higher to end at €3.38

A total of 17 million AIB shares were traded by close of business. The bank gained 25 per cent by 10 am. The share price hovered around the €3.30 mark by mid-afternoon, but ended the day at €3.37 a gain of 28 per cent.

Things were quieter for the third publicly listed banking institution, Irish Life & Permanent, which is not participating in the Nama process. Its share price lost 5 per cent mid-morning but regained some ground to close fractionally lower at €5.85.

There was also a reasonable level of activity around non-banking stocks, according to traders, although volumes were relatively low. Construction company, CRH was solid throughout the day, ending 0.5 per cent higher at €19.75. The company, which generates almost 50 per cent of its revenue in the United States, was given a boost by the news that new US house building activity rose in August to its highest level in nine months.

Building materials group Grafton also performed well, advancing 3.4 per cent, after European DIY retailer Kingfisher posted results which met market expectations.

Independent News & Media continued its recent rally gaining 12 per cent, to close at 33.7 cent.

Stock markets across Europe also ended the day higher, as investors continued to express optimism about an imminent global economic recovery.

London’s FTSE ended the day 0.8 per cent higher at 5164, bolstered by a strong performance from banking and energy stocks. The Paris CAC and the Frankfurt DAX were both up just over 0.5 per cent closing at 3,835 and 5731 respectively.

Wall Street was also higher this evening, as figures revealed an increase in house building activity in August. The markets were also boosted by separate figures, which showed that the number of workers filing for unemployment benefit fell last month.