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ISEQ stages strong rebound

Wednesday, April 16 17:37:27

The ISEQ's near week-long losing streak ended today as global markets received a boost from new Chinese economic growth data.

By 12:30, the ISEQ was up 75.44 points to 4,922.93.

European shares rose, reversing the previous session's slide as economic growth data from China came a touch above forecasts. Shares in Tesco, the world's No.3 retailer, gained 1.7 percent, bouncing after a 15 percent slide in two months as traders said a fall in profits reported by the group was not as steep as some had feared.

The Irish government published its latest forecasts on the Irish economy yesterday, the first since last October's Budget, in its draft Stability Programme Update (SPU). "The prudent approach to budget forecasting has been a sensible approach over recent years, with upside surprises playing a role in returning confidence to the Irish sovereign. We believe the latest SPU is once again on the cautious side and that budget deficits over the next two years will come in better than the published estimates by the Irish government," said Goodbody Stockbrokers.

Shares in food firm, Origin Enterprises, rose 20c to E7.80. Syngenta, the Swiss based agri-chemicals company, has seen its Q1 sales increase 5pc, including 2pc volume growth, mainly from its crop protection products. In the EMEA region growth was up 10pc due to an early start to the season and high weed and disease pressure. "Origin is in the middle of its busy period and we expect is witnessing similar trend in its core UK market. We are forecasting over 25pc profit growth from its UK agronomy business this year due to a combination of improved weather conditions and ongoing integration benefits," said Goodbody's.

Smurfit Kappa shares climbed 72c to E17.14. The latest data from FOEX shows that European OCC prices declined by just over E3/tonne (-2.7pc) in the last week. This represents the largest weekly fall in European OCC prices since mid-2012. FOEX notes that while European domestic demand for OCC remains in good condition, export demand has been weak. This follows the first signs of weakness in RISI OCC price indices last week. "While short-term concerns will be heightened following recent pricing moves in testliner and OCC, we see attractive long-term value in Smurfit Kappa and Mondi at present with 30-40pc upside to our twelve month price targets. Nonetheless, the pricing dynamics will be the central focus when DS Smith (April 30th), Smurfit Kappa (May 2nd) and Mondi (May 14th) update the market in the coming weeks," the broker said.