Banks, building stocks lift Iseq

The Irish index of shares rose 19 points today, lifted by financial and constructions stocks.

The Irish index of shares rose 19 points today, lifted by financial and constructions stocks.

By 11.57am, the Ise was at 2,966.49, as financial stocks continued to gain following Friday's European stress tests results.

Banks throughout Europe were also buoyed by strong results from UBS and relief over plans by regulators to scale back tough rules.

Bank of Ireland was up 6.5 per cent by 11.15am, trading at almost 83 cent. AIB added 1 per cent, or 1 cent, to trade at 96 cent.

Irish Life & Permanent, which is not involved in Nama, gained 3.4 per cent to trade at €1.63.

Constructions stock also gained throughout the morning, following the annoucnement of the Government's revised spending plans fort he next seven years that were outlined yesterday.

CRH rose 1.2 per cent today to trade at €16.67 this morning. Kingspan, meanwhile, rose 2.7 per cent to €5.63.

The Government yesterday cut the investment figure to €39 billion from €75 billion originally intended under the 2007 national development plan. However, the revised plan was broadly welcomed by the industry, providing certainty for the period to 2016.

Bloxham stockbrokers said CRH's acquaition of a cement import terminal in Wales was "timely" as it would allow the company to export to export capacity from its Irish operations into the UK.

Elsewhere, European shares hit a five-week intraday high today.

By 8.28am, the FTSEurofirst 300 index of top European shares was up 0.6 per cent at 1,055.14 points, having earlier hit its highest level since June 22nd.

The Euro STOXX 50 index, the euro zone's blue-chip index, was up 1 percent at 2,770.28 points, holding above its 50 percent Fibonacci retracement from a high in April to a low in May of 2,737.62 points - a key technical level which it crossed for the first time in five weeks yesterday.

A raft of corporate results dictated the direction for equities as the European earnings season gets into full swing.

"Expectations are rising for earnings. Companies are guiding full-year forecasts up in spite of concerns about a loss of recovery momentum ... and that is helping to keep these markets reasonably firm," said Mike Lenhoff, chief strategist at Brewin Dolphin.

UBS surged 8.2 per cent as the bank said strong equities and currency revenues drove second-quarter net profit well above forecasts.

French banks Societe Generale, Credit Agricole and BNP Paribas featured among the top gainers, up 6.4 to 8.8 per cent, boosted by strong results from peer UBS and as the Basel Committee said they will scale back many of the proposals to beef up bank capital and liquidity rules.

"As key Basel 3 'losers', the French banks should benefit from these revisions, in addition to the sovereign disclosure at the stress tests," UBS analyst Omar Fall said.

The results of European bank stress tests late on Friday helped restore confidence in the sector as it contained no major negative surprises, and showed only seven of 91 banks failed the tests aimed at gauging banks' ability to withstand financial shocks.

"Though one might question the merits (of the stress tests), the formality of having gone through the exercise is a worthy undertaking as it demonstrates the euro zone is attempting to resolve its sovereign debt crisis and that is helping to improve the underlying tone of the market," Mr Lenhoff said.

Also rising after results, Deutsche Bank added 3.1 per cent after Germany's top lender posted second-quarter pretax profit in line with expectations, helped by lower loan loss provisions amid weaker industry trends in investment banking.

Oil major BP said it would take a charge as a result of the Gulf of Mexico oil spill amounting to $32.2 billion, driving it to a second quarter loss of $16.97 billion

It also announced that Chief Executive Tony Hayward will step down on October 1st and will be replaced by fellow executive Robert Dudley. The stock added 0.5 per cent.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 rose 0.6 to 1 per cent.

Additional reporting: Reuters