Irish bond yields back to highest level in 3 months

IRISH bond yields shot back up yesterday, to their highest level in more than three months — another knock-on effect of investor uncertainty over a solution to the eurozone debt crisis being found.

The yield — or the interest rate quoted by buyers of government debt — on 10-year Irish bonds rose from 7.7% to 8.21%.

That is their highest level since early July and the rise follows a positive number of weeks when Irish yields fell.

Canadian credit ratings agency DBRS, which downgraded Ireland’s long-term foreign andlocal currency debt inAugust, said yesterday that slower economic growth in Europe and the US is likely to hamper prospects for a quick Irish economic recovery.

There was equally poor news for stock markets (despite European Commission president Jose Manuel Barroso announcing he will be making proposals for European bank recapitalisation), as European bourses on a whole left a four-day winning streak behind them.

Germany’s DAX index and the Swiss MarketIndex were the only two main European bourses to show any kind of growth as European investors sold ahead of the key Slovakian parliament vote over increasing the power of the eurozone’s rescue fund.

In Dublin, there were gains for the likes of Elan and Kerry Group, but falls for usual heavyweight stocks like Aryzta, ICON, Paddy Power, CRH and United Drug.

The ISEQ, on a whole, suffered only its second daily fall in seven days — down by 1.25% to just over 2,558 points.

Elsewhere in Europe, while the DAX in Frankfurt was up by 0.3% and Switzerland’s benchmark index rose by just over 0.2%; there were falls nearly everywhere else.

London’s FTSE-100 was down by 0.06%, the CAC-40 in Paris fell by 0.25%, Spain’s IBEX fell by just over a half a percent and the Milan Stock Exchange was down by just under 0.4%.

Yesterday evening saw the main US exchanges in mixed trading.

Earlier, both the Hang Seng and Nikkei were up healthily in Asian trading. The Nikkei 225 rose 168, or 2% to 8,773.68 while the Hang Seng was up 2.43% at 18,141.59.

In the US, the Dow Jones industrial average was down 16.88 points, or 0.15%, at 11,416.30.

The Standard & Poor’s 500 Index was up 0.65, or 0.05%, at 1,195.54.

The Nasdaq Composite Index was up 16.98 points, or 0.66%, at 2,583.03.

Alcoa, the biggest US aluminum producer, gained 2.6% ahead of its results.

Apple, Bank of America. and Caterpillar added at least 2% to pace gains among companies most-tied to the economy.