Iseq closes up as equities finish short of starting point

Iseq:2,501.71 (-18.60) Settlement date:October 3rd

MARKETS ZIG-ZAGGED to form a “W-shaped” day of trading on the Irish Stock Exchange yesterday, but equities finished short of where they had begun.

The Iseq closed down 0.74 per cent, as investors across Europe concluded that they may have been prematurely optimistic about the advent of a definitive political solution to the euro zone debt crisis.

If EU leaders don’t acknowledge that they have a plan in the works for Greece soon, the relief rally of recent days may be further undone, dealers noted. position

The French Cac and the German Dax also managed to contain their losses to less than 1 per cent, though in London the FTSE slipped 1.4 per cent.

The most dramatic movements of the day in an Irish context came not on equity markets, but in bond trading, where the recovery of Irish 10-year bonds continued. The yield on 10-year bonds fell to below the levels that prevailed at the time of the EU-IMF bailout.

They closed at 7.88 per cent, down 91 basis points on the previous day, with fixed-income traders hailing the move as further evidence of investors’ confidence in Ireland’s ability to repay its debts, grow its economy and emerge from any Greek default relatively unscathed.

On the Iseq, food group Greencore advanced 5 per cent to 65 cent, a gain of 3 cent, while buying interest in Elan helped it to a 2 per cent gain, finishing at €7.96.

Paper and packaging group Smurfit Kappa also resumed its upward trend, climbing 2.4 per cent to €4.81, up 11 cent, as an industry report highlighted a recovery in paper prices in China.

However, cement-maker CRH, the largest stock on the index, fell more than 1 per cent to €11.53, while Ryanair lost half a per cent to close at €3.26.

Drinks group C&C fell 2.5 per cent to €2.83.