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ISEQ ends flat as euro crisis re-ignites

Thursday, September 27 17:39:24

The ISEQ closed flat today after spending the week in the red as investors sought out bargains and as European stocks rose.

The index was up 5.10 points to 3,273.83.

Irish bond yields suffered their most significant rise since May. The asking price on the nine-year bond rose from 5.02pc to a high of 5.18pc. The statement from the Dutch, Finnish and German finance ministers that legacy assets should remain the responsibility of national authorities was interpreted by some commentators as an assertion that the ESM will not be allowed to directly capitalise Spanish and Irish banks. However, both the Irish government and European Commission yesterday drew attention to the June 29th agreement by heads of government, indicating that the ESM will be able to directly recapitalise banks. Furthermore, it is worth noting that EFSF funds have already been earmarked to help recapitalise Spanish banks, albeit channelled through the FROB fund, with the ultimate liability remaining with the Spanish government, according to Davy Research.

Strong mining companies helped to revive European shares today, buoyed by expectations that China could launch more stimulus, though euro zone tensions were likely to make trade jittery.

CRH's shares fell 3c to E15.09. Its US peer, Texas Industries, has reported a first quarter loss (to the end of August) of $0.09. While this is a significant improvement on last year's losses of $0.27 it is behind consensus for losses of $0.02. The variance seems to be higher costs, especially overheads, Goodbody Stockbrokers said.