ISEQ falls 2.3% over pace of recovery fears

THE ISEQ suffered a 2.3% drop last month, upping the second quarter’s loss to 9.4%, as ongoing concern over the pace of recovery in the global economy has continued to lead to a major sell-off of equities.

“Most European markets lost ground during the month, with the E300 [the FTSEurofirst 300 index] declining by 0.8%, which is below the June average of -0.3% since 1986. Sector breadth for the E300 was positive as 17 of the 32 E300 sub-sectors gained ground in June,” according to Jim O’Neill of Davy Stockbrokers.

“The 2.3% loss experienced by the ISEQ is significantly below the June average of -0.5% since 1985. The 9.4% loss for the quarter completely wiped out the gain of 6.8% achieved in the first quarter. The ISEQ underperformed the E300 by 1.6% in June and by 1.7% in the second quarter, bringing its year-to-date outperformance to 1.9%. Breadth remained negative with 26 stocks gaining, 28 declining and two finishing flat,” he added.

The Dublin market has had a typically topsy-turvy beginning to July and the second half of the year — down 82 points on Thursday, but up by nearly 2% yesterday led by the banking, aviation and construction stocks.

The big building materials stocks enjoyed positive movement on Friday. CRH (ahead of a major trading update due next week) closed out the week with a 30c gain to €16.72; while Grafton Group was up by 10c at €3.02 and insulation product specialist Kingspan grew by nearly 2% to €6.10.

In aviation, Aer Lingus was up by 5c at 82c and Ryanair grew by 10c to €3.68.

Each of the banking stocks were moving in a positive direction — AIB tagging on 2c to reach 82c, Bank of Ireland up by the same amount at 63c and Irish Life & Permanent (IL&P) gaining 3c to close at €1.43. The other main financial stocks, FBD and IFG, gained 6c and 1c respectively to close at €6.70 and €1.15.

Elsewhere — on a day when the ISEQ was up by over 1.7%, or nearly 50 points, at just over 2,844 points — drug group Elan gained 6% (21c) to reach a closing price of €3.83, and food group Glanbia grew by 10c to reach the €3 per share mark.

Overseas, there were marginal gains in London (0.7%), Paris (0.3%), Tokyo (0.1%) — although the German DAX fell by nearly half a percent — on the back of more positive further job data emanating from the US Government.

Other strong movers in Dublin were Tullow Oil — which gained more than 6%/75c — to reach €12.45; C&C (up 5c to €3.23) and food group Aryzta which rose by 59c to €30.59.

However, multi-disciplined support services group DCC fell by 15c to close at €17.77.