Market volatility continues

THE volatility seen on the international markets over the past week-and-a-half continued yesterday, with most exchanges back up after significant dips on Wednesday.

The drivers for the latest upturn were the announcement that German and French leaders will meet next week to attempt to thrash out new proposals to better manage the euro; and better-than-expected jobs data from the US.

The Franco-German talks will target more stability for the markets, which have remained shaky over fresh concerns of a global recession and doubt about the solidity of such powerful countries’ credit ratings. On the latter issue, the European Commission yesterday rejected the rumours that France could face a ratings downgrade.

Despite the French banks’ share prices falling again yesterday, on the back of concern over their exposure to Greek debt, the CAC-40 index in Paris was back up by nearly 3% at 3,090 points. This followed a 5.5% drop on Wednesday.

Elsewhere in Europe, the FTSE in London was back up by 3.1% yesterday at 5,163 points, while Frankfurt’s DAX regained 3.3% to close at 5,798 points.

Dublin’s ISEQ index was up by 1.63%, or 39.4 points, at 2,449 points — the likes of CRH, DCC, Elan, Grafton, Kingspan, Tullow Oil and Ryanair showing particularly good gains.

In New York, stocks surged the most in two years and treasuries sank as an unexpected drop in US jobless claims and higher-than-estimated earnings tempered concern the economy is slowing. The Dow Jones closed up 3.95% while the Nasdaq closed up 4.69%.

Healthcare services group, United Drug — which gave an upbeat operational outlook in its latest trading statement, but warned that rationalisation measures were pending at its Irish operations — was up by nearly 5.5%, or 11c, to €2.13.

However, Smurfit Kappa Group was down by a further 3c, even after posting a positive set of financials earlier in the week and food group, Aryzta shed €2.88 to close at €31.32.

On a Europe-wide basis, bank shares fell to their lowest level for nearly two-and-a-half years. Latest bank lending by the European Central Bank (ECB) jumped to a three-month high, a move interpreted as a sign that some banks may have renewed need for emergency cash injections.

Further afield, the main Asian markets slipped slightly.