Iseq fails to benefit from US gains

World stocks edged higher yesterday after data showed the US services sector grew at a slightly faster pace in May, but the Iseq fell nearly 2% as the eurozone crisis escalated, with Spain saying it was being shut out of credit markets.

The Iseq index was down 1.7% despite rises in many other European and US markets. Two of the index’s large shares, Kenmare Resources and TVC Holdings, were both down over 5%, and Total Produce, Aryzta, and AIB were down over 4%. Other shares down substantially included Ryanair, Fyffes, CRH, and Elan.

Spanish finance minister Cristobal Montoro made an appeal to the EU to help Madrid recapitalise its debt-laden banks.

The G7 finance chiefs agreed yesterday to work together to deal with the problems besetting Spain and Greece, but the meeting had little impact on financial markets.

“Europe’s obviously a concern, but we’ve been selling off for weeks on that,” said Peter Boockvar, equity strategist at Miller Tabak & Co in New York. “A slightly better than expected services number, which makes the majority of the US economy, is a sigh of relief in the face of a lot of bearishness.”

The eurozone’s blue-chip EuroStoxx 50 index gained 0.8%, with volumes thinned by a second day of British public holidays.

After Tuesday’s G7 finance ministers’ conference call, investors are waiting for the ECB policy meeting today, Federal Reserve chairman Ben Bernanke’s testimony to the US Congress tomorrow, and the Greek elections and G20 meeting in Mexico, both on the weekend of June 17.

Funding options are narrowing for companies across the globe, as issuers are shut out of markets due to risk aversion for weaker credits and demand for spread that is sending costs soaring.

The euro, earlier at a one-week high of $1.2542, fell 0.3% to $1.2459.