European stocks stage recovery

Brian O’Mahony, Chief Business Correspondent

Dublin ISEQ rose 0.56% yesterday as markets put the dreadful events in London rapidly behind them.

Early on Thursday, Dublin was down 3.6% or over E3 billion while London saw 75bn wiped off its value as investors took flight from the market.

By the end of trading Thursday both markets had regained half their losses with Dublin off just 1.3% and London down 1.4% on the day.

By late afternoon yesterday Dublin had recovered a further 0.56% from Thursday’s close while in London the FTSE was up 1.1% on the day driven by strong gains by British Airways, Shell Transport & Trading Co and Nokia. This was a rebound from its biggest one day decline in almost a year.

Analysts said fund managers took the view that the bombings would do no material damage to Britain’s economy.

“The stock market is vaccinated against this kind of attack”, said Jacques-Antoine Bretteil, who manages 437 million at International Capital Gestion in Paris. “There isn’t any very serious economic impact. We can’t let ourselves be taken over by panic,” he said.

The Dow Jones Stoxx 600 Index rose 0.8% to 276.83 in morning trading and by late yesterday afternoon the Dow Industrial

Average was up 0.37% as markets got over the initial shock of the assault on London.

Bloomberg reported that National benchmark indexes advanced in all 17 Western European markets that were open yesterday.

France’s CAC 40 Index rose 0.9% while Germany’s DAX Index climbed 0.8%.

Oil rose in New York, heading for its third weekly gain in four driven by fears that Hurricane Dennis will disrupt petroleum shipments and output in the Gulf of Mexico, where 38% of US oil supply is delivered.

Oil rose as much as 81 cents to $61.54 (E51.55) a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Prices are bouncing back from Thursday’s terrorist attack-related declines, said a London broker.

The hurricane is there, veering toward Alabama and Florida and there are still longer term concerns about refining capacity for the fourth quarter, he said.

Crude oil for August delivery rose as much as $1.01, and was up 43 cents at $61.16 (E51.24) a barrel in electronic trading on the New York Mercantile Exchange.

Prices reached a record $62.10 (E52) in New York in early dealings on Thursday before plunging $4 per barrel to $58pb (E49) once the impact of the bomb attacks gripped the markets.

Even by late Thursday however, oil had gone back up to over $61 (51) per barrel stressing the fact that demand is a huge issue across the globe as the quest for economic growth spurs demand from China, India and other developing economies.