Tuesday, July 17 12:49:13
The main Dublin shares index dipped in line with world markets as investors keenly await testimony from Fed chief Ben Bernanke this afternoon.
By 12:30, the ISEQ was down 13.83 points to 3,211.34.
Markets hope will point to further stock-boosting monetary stimulus as waning global growth weighs on the outlook for company earnings. The FTSEurofirst was down 0.76 points, or 0.1 percent at 1,042.95 by 1028 GMT, with the index trapped in a range between 1,030 and 1,050 as the lack of any incentive to add risk kept investors on the sidelines. "The market is precipiced on a lot of central bank action but that is all there is. It is like driving a car on fumes -- after the liquidity is pumped in to fuel the economy, growth must come, and at the moment there is not any really any," Robert Quinn, European strategist at Standard and Poor's equity research in London, said.
The government is set to announce a new fiscal stimulus package for the Irish economy today. Expectations are for spending announcements in excess of E2bn, or 1.3pc of nominal GDP. Spending on roads, healthcare facilities and a new campus for the Dublin Institute of Technology (DIT) are amongst the capital-intensive expenditure projects mooted. The E100m investment in Irish schools already announced by the European Investment Bank (EIB) will be included in the final figure for the overall fiscal stimulus.
Shares in CRH fell 7c to E15.43. The value of US highway funds obligated for projects fell by 40pc in June compared to the same month last year. Year-to-date, obligations are 10pc lower. Obligations are a longer-term leading indicator for highway construction activity in the US. When a state has a project designed and planned, it applies to the Federal Highway Administration (FHWA) for the federal portion of the funding. If the FHWA approves the project, the funds are "obligated". It is then up to the state to decide when to proceed with the project and award the contract. This is then captured in the contract awards data which is a better short-term indicator of activity levels. Contract awards data have been improving in recent months, Davy notes.
Shares in Kerry Group fell 36c to E37.07. Davy Research notes that the global market for natural flavours is growing at 9.1pc per year, according to a report in Food Navigator-Asia which cites RTS Market Research as its source. The report says that within the next three years Asia-Pacific will overtake Western Europe for natural flavour sales, led by growth in China. The US is the biggest market by volume and value. The biggest end-uses for natural flavours are soft drinks and ice cream but the end-use markets exhibiting the fastest growth are yoghurt and confectionery. The natural flavours market is valued at $3.3bn, according to RTS.