US rebound fails to raise ISEQ after its awful month

STOCK markets across Europe were down sharply in early trading yesterday with the ISEQ Index off 2.7% in early trading.

Anglo was off by 8% at one point while Irish Life (ILP) and Permanent was down 10% with Bank of Ireland (BoI) lower by 11% in early trading.

But a strong rebound in New York in which the Dow gained up to 3% saw all European markets recover before the official close. The ISEQ managed only a modest move into the black however, closing up about 0.4% on the day with AIB and Anglo gaining while BoI and ILP were down 10.56% and 4.12% respectively.

Anglo is due to produce results today and the modest gains suggests investors are not too fearful of what the bank will produce by way of bad debts.

The modest gains by the ISEQ yesterday do nothing to lift the gloom surrounding Irish shares. Latest figures from the Irish Stock Exchange show that in November financial shares led the downward spiral.

Official stock exchange figures show the index fell 16.2% last month, bringing its year to date loss to 63.4%.

As a result the ISEQ at end November was 74.6% off its all-time high reached in February 2007.

In November alone the Irish banks lost a whopping 42.85% of their total value pushing their year- to-date loss up to a massive 85.9%, as fears about the future of Irish banks continue to undermine their shares.

The scale of the decline in the banks is highlighted by the fact that Irish financials now account for 16.5% of the index compared with over 43% this time last year.

The earnings outlook for publicly quoted Irish companies also continues to deteriorate, the stock exchange report revealed.

Elsewhere European bourses closed significantly higher after the Dow rally.

The FTSE 100 index of leading shares rose 1.4% to 4,123 points. In Paris, the CAC 40 was up 2.35% and the DAX jumped 3.1%.

On Monday, European markets suffered very heavy losses of 5% and more after news that the US economy has been in recession since December.