Irish shares show worst performance in six years

THE worst January performance on the Irish stock market in six years has brought its 12-month loss to more than 27%.

The ISEQ shed a further 3.9% in January, with financials the hardest hit, down 6.8%, while industrials lost 1.7%, according to Davy Stockbrokers.

However the January outcome for the ISEQ still represents an out-performance of 8.9% over the FTSE Eurofirst 300 index, making the ISEQ the top-performing developed market in Europe for the month.

“The ISEQ has recently generated some positive technical signals, suggesting that momentum may be shifting positively,” said Davy in a note.

It said markets in January were dogged over concerns of a weakening US economy and the continuing fallout from the subprime fiasco.

The Fed’s cutting of rates by a total of 125 basis points, combined with President George W Bush’s stimulus package, failed to provide a meaningful rally and resulted in significant losses for all US indices, according to Davy.

“Against this background, it is hardly surprising that the ISEQ would also continue to decline. However, a 3.9% fall represents significant outperformance relative to its international peers,” it added.

Of the 22 trading days in January, the ISEQ gained on 11 of these days and also declined on 11.

The average performance was -0.2%, while the biggest gain and loss were 5.0% and -4.2% respectively.

Also yesterday a report from Rubicon Investment Consulting found Irish pension funds also suffered their worst month in January since September 2002.

Having declined 2.6% last year Irish pension funds continued to struggle last month according to Rubicon, with the average pension fund declining a further 6.7% last month.