Irish banks and housebuilders join in global stock markets rally on Covid-19 'narrative recovery'

Global stock markets moved higher again, slewing off concerns about resurgent Covid cases in some parts of the US, as investors hope for a stronger than expected recovery following the global lockdowns.
Irish banks and housebuilders join in global stock markets rally on Covid-19 'narrative recovery'

Global stock markets moved higher again, slewing off concerns about resurgent Covid cases in some parts of the US, as investors hope for a stronger than expected recovery following the global lockdowns.

Chris Beauchamp, chief market adviser at online broker IG, said "the recovery narrative" had taken hold, while "the positive mood was reinforced by the stubborn refusal of the US death curve to move higher".

The Eurostoxx index that tracks eurozone shares closed up 1.69%, the Ftse-100 in London which largely consists of global-facing companies such as oil giants, ended 2% up, and US stocks again rallied after moving sharply higher in the previous week.

"After Thursday’s non-farm payrolls excitement is does look as if the data is on the right track to keep propping up the stock market rally," Mr Beauchamp said.

In the US, Amazon shares topped $3,000 for the first time, extending a rally that has left most Wall Street analysts in the dust.

Shares of the e-commerce giant climbed as much as 4% to almost $3,005, bringing gains so far this year to 63%.

In Ireland, the two main banks, AIB and Bank of Ireland which international investors use as proxies for the Irish domestic economy climbed by 3% and 6%, respectively.

Irish-based global packaging firm Smurfit-Kappa closed 3.6% higher, reflecting hopes for rebound in demand in Europe and the US.

And the two housebuilders, Cairn Homes and Glenveagh, which along with the Irish banks have been among the worst domestic casualties of the Covid-19 economic fallout, also rose strongly, by 2.7%.

The Iseq Overall index rose 1.6% in the session - meaning the index is back to levels last seen in late March when the lockdown restrictions in Ireland were into their second week.

In London, UK homebuilders also jumped on a report of property tax concessions to buyers.

Barratt Developments and Taylor Wimpey led gains on the Ffste-100 as a report said UK chancellor Rishi Sunak planned to raise the property tax threshold to as high as £500,000 (€554,420) in an attempt to exempt most homebuyers from paying any stamp duty.

Barratt also reported a higher-order book value and said it was starting the new financial year with “cautious optimism”.

UK shares had joined in an Asian rally that was powered by a surge in China's blue-chip stocks even as soaring US coronavirus cases delayed reopenings.

“With an unprecedented amount of cash in the system, equities and high-yielding bonds are attracting a lot of interest from investors,” said Hussein Sayed, market strategist at FXTM.

“That may continue to push risk assets higher, although valuations are approaching extreme levels.”

The Ftse-100 has rebounded more than 25% from a virus-driven crash in March, aided by historic global stimulus and improving economic data.

Insurer Aviva gained almost 5% as it said Maurice Tulloch was stepping down with immediate effect for family health reasons and named independent director and former Zurich Insurance executive Amanda Blanc as his replacement.

- Additional reporting Bloomberg and Reuters

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