Value of Irish shares up €1.3bn

AROUND €1.3 billion was added to the value of Irish shares yesterday, as blue-chip stocks had a strong start to the week despite lower trading volumes as a result of the bank holiday.

The benchmark ISEQ index added 1.7% on the back of strong gains by high-profile shares such as Eircom, AIB and Grafton. But trading volumes were thinner than usual, at around half of Friday’s levels.

Eircom surged 5.3% thanks to renewed demand for telecoms stocks in the wake of Spanish phone company Telefonica’s €26 billion offer for mobile operator O2. Analysts predicted greater demand for telecoms stocks thanks to a fresh wave of consolidation in the sector.

Some said the swoop for O2 could spark a bidding war as other industry heavyweights look to increase their presence in the company’s key markets of Britain and Germany. But it also brought into focus the expansion plans of the sector’s biggest companies and the limited number of potential takeover targets.

Elsewhere, financial stocks were in demand as AIB added 3.65% and Irish Life & Permanent gained 2.8%. Anglo Irish Bank was 2.7% higher but Bank of Ireland finished largely flat.

Other big winners were shareholders in Ryanair and DIY and builders merchants group Grafton. Ryanair gained 3.4%, while Grafton finished 2.3% higher. Food group Greencore gained more than 2%. Building materials group CRH and ferry operator Irish Continental also finished ahead.

There was also good news for Waterford Wedgwood shareholders as the troubled luxury goods group jumped 14% on the day, closing at 6.5c after very light trading. Shares worth less than €100,000 changed hands. Household products group IWP also had a good day, adding 10% in light trading after weekend media reports that linked it with a potential takeover.

The thin trading volumes hurt investors in engineering group Unidare, which fell 3.3%, and housebuilder McInerney, which suffered a 1% drop.

Most major international stock indices ended yesterday in positive territory. London’s FTSE 100 added 2% but failed to match gains elsewhere in Europe. The CAC 40 in Paris was 2.5% higher, while the German DAX was 2.1% ahead. Asia’s Hang Seng and Nikkei indices recorded gains of 1.2% and 2% respectively. American markets were also higher in early trading.