European bourses cautious on eurozone recovery plan
The Irish element of the EU deal — which included a lowering in the interest rate on our bailout loan and a widening of the repayment deadline — directly resulted in the combined value of Irish shares rising by around €400m yesterday.
The 18 point gain seen on the ISEQ index of Irish shares on Thursday grew to a 41 point — 1.42% — rise yesterday, as investors grew more confident over the future wellbeing of the eurozone.
But while gains were evident across each of the major bourses in Europe, they were modest compared to the initial increases in early trading.
London’s FTSE finished the day with a 0.6%, 35 point rise, to 5,935 points.
The CAC-40 index in Paris and the DAX in Frankfurt were also up by less than 1%; Paris by 0.7% and Frankfurt by 0.5%.
Overall however, the European market reaction was favourable to the latest EU rescue package judging it to be a step in the right direction. All in all, the Stoxx Europe 600 index posted its first weekly gain in the last three weeks, in the aftermath of Thursday night’s agreement.
“The general view is that it appears to be a comprehensive deal that exceeded market expectations.
“Consequently, we’re seeing something of a relief rally. However, the underlying economic fundamentals remain concerning,” one analyst told the Bloomberg news service.
The Irish reaction was healthier and there were plenty of strong climbers in Dublin, yesterday, with the likes of Tullow Oil (up 42c to €15), Aryzta (up 52c to €37.47), Smurfit Kappa Group (up 35c at €7.49) and Paddy Power (up 36c at €34.73).
Building materials giant, CRH gained 20c to close at €14.46; food group Glanbia was up by 11c at €4.76 and Ryanair — ahead of latest quarterly figures on Monday — closed the week with an impressive 16c gain to €3.46.
US markets showed less positive results, yesterday, with poor financial results from major stocks like Microsoft and Caterpillar dampening the mood after more upbeat trading figures earlier in the week.
Earlier however, the main Asian markets had shown solid gains, with Tokyo’s Nikkei index climbing to a two-week high.
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