THE moves by the Government yesterday to limit taxpayers’ exposure to property bad debts in the Irish banks had little impact on market sentiment.
While this could be seen as a negative the shares in the major banks at the centre of the NAMA debate, Bank of Ireland and AIB, both recorded gains in a day that saw the ISEQ 100 share index rise a very modest 0.4% yesterday.
AIB rose 1.34% yesterday to close up 3c at €2.34 while Bank of Ireland moved ahead even stronger gaining 10.63% or 24c to close at €2.46.
In recent weeks both stocks have continued to move off the all-time lows they hit earlier in the year as the banking crisis deepened and both traded well below €1 as uncertainty about their futures raged on.
A quick scan across the ISEQ yesterday highlighted continuing weakness in construction stocks and those in related areas, a sector badly hit by the global economic slowdown.
CRH, one of the biggest companies listed on the ISEQ fell 1.39% to €18.49, a decline of 26c on the day.
Grafton Group, with major interest in the DIY sector in Ireland, was down also fading by 2.84% to €3.77 a fall of 11c on the day.
The market currently is in effect reflecting sector weaknesses and strengths and while AIB and Bank rose yesterday they are coming off very low bases.
Investors who got in when they were on the floor have done well at this stage however, despite the uncertainty engulfing both banks, a situation likely to remain a factor in their ratings for quite some time.
Food and drinks stocks have proved a good defensive play during the stock market meltdown and yesterday was no exception.
Kerry Group, Ireland’s leading ingredients and consumer food giant, gained 5% or €1 euro to close at €21 a share.
Glanbia, which has been evolving in the nutritionals sector of the drinks industry with a key range of drinks for the global sports market gained almost 4.3% on the day to close up 12c at €2.93.
Recent market comment suggests analysts expect to see progress in the ISEQ going forward as the US and other key economies such as Germany and France start to return to growth even if huge uncertainty still surrounds the future of this economy and of the banks in particular.
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