Iseq rises on banks, drugmakers

The Irish market rose modestly today, as gains in banks and drugmakers were reflected across Europe.

After a strong performance yesterday, Irish Life and permanent continued to gain, rising 3 per cent to €3.84. There were reports today that the financial institution was close to completing a securitisation that will unlock €200 million of capital.

Brokers said investors may consider the shares a safer bet; it is not participating in the National Asset Management Agency and is being given some support by the life and pensions business.

After a weaker session yesterday, AIB regained some ground, rising 3.8 per cent to €1.48. bank of Ireland did not perform as well, gaining 0.6 per cent to €1.51 following a flat session yesterday as brokers said a lack of surprises failed to prompt a sell-off.

Shares in Aer Lingus crept higher in trade, adding 5 per cent to 68 cent just before 1.30pm. Brokers noted that US airlines Delta, United and Continental are planning increases in the cost of checking bags, following on from last week's $20 rise in the round-trip fuel surcharge on flights between the US and Europe by five major carriers.

Rival airline Ryanair was up 3.3 per cent to €3.46.

Shares in drugmaker Elan rose 3.9 per cent to €5.51 this afternoon. The company gave an update to investors yesterday on a new test to help in the prediction and prevention of cases of a serious brain disease progressive multifocal leukoencephalopathy (PML) in patients with Multiple Scelerosis on Tysabri.

With heavyweight stocks such as CRH trading almost flat this afternoon, the index was up 31.57 points to 3,119.42 by 1.32pm.

Independent News and Media slipped 1.7 per cent to 11 cent, while Grafton was down 0.3 per cent to 3.14.

European shares rose in afternoon trade after the European Central Bank kept interest rates on hold as expected, while investors awaited earnings from US firms.

By 1.16pm, the pan-European FTSEurofirst 300 rose 0.6 per cent at 1,063.33 points, gaining for the second straight session.

Banks were higher, with Barclays, Deutsche Bank, Credit Suisse and BNP Paribas up 0.9 to 2.2 per cent.

The ECB kept interest rates unchanged at a record low of 1.0 per cent

Appetite for risky assets such as equities rose as the VDAX-NEW volatility index shed 7.8 per cent to a 19-month low. The lower the index, which is based on sell and buy options on Frankfurt's top-30 stocks, the higher the market's desire to take risk.

The earnings season in the United States is seen as giving direction to equities, and investors will closely watch quarterly figures from chipmaker Intel today and JPMorgan Chase tomorrow.