International stock markets rally after rates cut

INTERNATIONAL stockmarkets advanced for a second day’s growth, yesterday, on the back of the European Central Bank’s unexpected interest rate cut and news that a referendum on the latest Greek bailout is now unlikely in its intended form.

The French and German national benchmark indices were the biggest climbers — the CAC-40 in Paris up by just over 2.7% and the DAX in Frankfurt gaining just over 2.8%.

London’s FTSE-100 was up by 1.12% — a 61 point rise to 5,546 points — and there were also healthy gains for the main markets in Spain and Italy.

The Stoxx Europe 600 price index — down by nearly 7% already this week, over concern about Greece — was back up by over 2% yesterday.

The ISEQ, meanwhile, put a bit more flesh on the bones of its recovery this week.

Down by over 4% on Tuesday and up only a smidgen on Wednesday, yesterday’s trading saw the Dublin exchange grow by nearly 3% to close at just over 2,682 points. Its growth was driven by steady gains for the likes of Dragon Oil, Aryzta, Origin Enterprises, Ryanair, Aer Lingus, CRH, Smurfit Kappa, Elan, C&C, Irish Continental, Greencore and Providence Resources.

Once again, DCC was among the notable fallers; along with Kerry Group, Merrion Pharmaceuticals, Glanbia and Donegal Creameries.

Overseas, the main Asian markets closed their latest trading session with notable falls — Tokyo’s Nikkei index falling by 2.2% and the Hang Seng in Hong Kong down by 2.5%.

Early trading in the US was showing a second day of steady gains, however, with the Nasdaq up by nearly 1.4%, the Dow Jones ahead by 1.25% and the S&P500 index rising by around the same amount.

The good start on Wall Street came about despite the Federal Reserve seeming to backtrack on Wednesday commentary and say that additional monetary stimulus may, in fact, be needed after all if the US unemployment level is to be lowered.

Fed chairman Ben Bernanke also suggested that improvement in the world’s leading economy will be “frustratingly slow”.