Recovery demonstrates the fickleness of global markets

THE fickle nature of the markets was again on view yesterday, as most major exchanges, including Dublin, rebounded.

Sat, 08 Nov, 2008 - 00:00

While Thursday’s talk of an extended global recession resulted in heavy losses — the Dublin market fell by more than 8% on the day — yesterday’s speculation that the Fed may be gearing up to announce fresh interest rate cuts and the fact that some major European stocks had good days, resulted in a day of varied recovery.

By midday New York time, the Dow Jones was up by 1.8% and the Nasdaq had gained 1.9%. There were similar gains of 2.7%, 2.4% and 2.6% on the FTSE, Paris CAC 40 and Frankfurt DAX, respectively.

Earlier, however, things didn’t look quite so promising as the Asian markets painted a stark warning. A profit warning from Japanese car maker, Toyota led to a 3.55% fall in Tokyo’s Nikkei Index, but Hong Kong, Seoul, and Singapore all rose.

After slightly higher rises earlier in the day, Dublin’s ISEQ ended Friday up by 0.83% at 2,827 points. The details showed just how volatile the ISEQ has been of late.

Drug making giant, Elan, which fell by nearly 10% or 49c on Thursday, reclaimed pretty much that same amount yesterday closing the week at €5.07.

Another of Thursday’s heavy fallers — CRH — was back up by 4.52%, or 70c, yesterday at €16.20. Grafton was another climber, up by 15c or 5.88% at €2.70. Ryanair gained 9c to close at €3.09, but food group, Kerry had another disappointing day, down 10c to €16.65.

Yesterday was also a classic mixed day for financial stocks.

For the second day running, Irish Life & Permanent’s share price rose by another 9c to €2.45. It was also a better day for AIB. Thursday’s 79c, 18% fall was followed yesterday by a 3.42%, 12c, increase to €3.63.

That’s where the good news ended. BOI had another poor day’s trading ahead of its interim results next week, falling 30c, or 16% to €1.62 yesterday — after dropping by 42c on Thursday. Anglo Irish took a 33c dip to €2, while FBD Insurance fell by 5.67%, or 67c, to close the week at €11.15.