ECB move on Greek bonds hits stock markets

A fall in Greek shares, sparked by the European Central Bank’s decision to stop accepting the country’s bonds, held back stock markets yesterday. Analysts warned that now that the bank had decided to use its veto, a solution had to be found quickly.

DUBLIN

Pending changes in the MSCI index sparked movement in a number of Irish stocks, according to traders, who noted that it had a knock-on effect on companies whose shares are not included in gauge.

Building materials group CRH, which is likely to have its MSCI weighting increased on the back of its €6 billion deal to buy Holcim Lafarge assets, dipped 1.5 per cent to close at €23.37.

Volumes were higher than usual, with just over 4.5 million of its shares changing hands in Dublin yesterday.

Bank of Ireland shed 1.38 per cent to end the day at 28.5 cent. Lenders were generally weak in Europe.

Aer Lingus fell slightly, losing 0.22 per cent to €2.25. Investors are waiting to see where IAG's effort to take over the airline goes next.

The group, owner of Aer Lingus rivals British Airways and Iberia, is prepared to offer €2.55 a-share for the airline.

Ryanair fell 1.06 per cent to €9.806 after gaining some early altitude during morning trading to hit €10. Its competitor, Easyjet, produced disappointing passenger numbers.

It now appears that Britain’s court of appeal will rule on Ryanair’s 29.8 per cent holding in Aer Lingus next week in a move that could have possible ramifications for the IAG approach.

Cider maker C&C climbed 2.26 per cent to €3.58.

LONDON

The UK Oil and Gas index rose 1.2 per cent after crude jumped about 5 per cent on falling output and rising violence in Libya.

Irish-based Tullow Oil outperformed the index, surging 5.61 per cent to 418.1 pence sterling on the back of the news. BG Group and Weir also rose. Analysts suggested that valuations had reached a point that could spark merger and acquisition activity in the sector.

Irish home-heating oil distributor DCC gained 0.96 per cent to 3,964 pence. Traders suggested that the colder than usual weather in its main markets, rather than crude prices, was responsible for the move.

BT Group plc added 4.5 per cent after agreeing to buy EE Ltd for £12.5 billion from owners Orange and Deutsche Telekom.

Rexam surged 20 per cent to 538 pence after saying beverage-can maker Ball Corp was in talks to acquire it. Ball's proposal values Rexam at 610 pence a share.

AstraZeneca dropped 3.4 per cent after the pharmaceutical maker reported worse-than-estimated fourth- quarter results.

The blue-chip FTSE 100 index ended 0.1 per cent higher at 6,865.93 points after falling to an intra-day low of 6,808.19 points earlier in the session.

EUROPE

Shares in National Bank of Greece fell 12.3 per cent and Bank of Piraeus declined 15 percent. Greek shares regained some ground after the ECB let the Greek central bank offer lenders emergency funding of up to €60 billion.

Software developer Dassault Systemes rose 8 per cent to finish as the FTSEurofirst's best performer after the company forecast further growth this year.

The euro zone’s blue-chip Euro STOXX 50 index fell 0.2 per cent. BNP Paribas fell 3.7 per cent after it warned that rising taxes and new regulations would hurt its 2016 earnings. Switzerland’s main SMI equity index also weakened by 0.7 percent, after the government warned that the franc’s surge in value would hurt the economy.

US

US stocks rose as oil bounced and Pfizer declared its intention to buy generic drug maker Hospira.

Michael Kors shares fell 2.8 per cent to $69.38 after the luxury accessories retailer posted third-quarter results and forecast a lower-than-expected profit for the current quarter.