Markets rise on talk of solutions

DETERMINED talk regarding a firm set of Franco-German solutions to the eurozone debt crisis had investors breathing easier yesterday and international stock markets rising.

Emerging from their latest policy meeting, French President Nicolas Sarkozy and German Chancellor Angela Merkel vowed to act with “lasting and quick responses before the end of the month”, united on their plans to stabilise Europe’s banking sector and counter the debt crisis.

That determination was echoed by EU President Herman Van Rompuy, announcing that he was postponing this month’s EU Summit from next week until October 23 to allow eurozone leaders finalise the “comprehensive strategy” to fix the region’s debt problems.

The immediate reaction was widespread gains across Europe’s main stock markets — led by Milan and Frankfurt. The Italian bourse was up by just under 3.7%, with the DAX gaining just over 3%.

The FTSE-100 in London started the week with a 1.8% — 96 point — gain and the CAC-40 index in Paris was up by 2.13%.

Shares in Franco-Belgian bank, Dexia — the lender at the centre of the current credit crunch fears — fell by over 30% on the back of details of its break-up.

Yesterday was the first day of trading in the stock since its shares were temporarily suspended last week.

The ISEQ, meanwhile, extended its good recent run into a new week — driven by strong gains from a mix of stocks including CRH, DCC, Donegal Creameries, Glanbia, Origin Enterprises, ICON, Paddy Power, Dragon Oil and Tullow Oil.

There were, however, notable falls for the likes of building company, Abbey and food groups Aryzta and Kerry Group — which shed 91c and 55c, respectively yesterday.

Asian markets were sluggish while good early gains were noticeable in the US — the S&P-500 up by nearly 3%, the Nasdaq up by just over 3% and the Dow Jones gaining nearly 2.5%.