Stress test results buoy banks

The results of the European stress tests on the banks which were published late last week continued to buoy volumes amongst the…

The results of the European stress tests on the banks which were published late last week continued to buoy volumes amongst the Irish banks with Bank of Ireland performing well again today.

The "star performer" of the day, Bank of Ireland finished up by 7 per cent at €0.84 in keeping with its British counterparts which also traded well. The bank enjoyed activity levels of 79 million between the UK and Irish markets.

AIB did not fare as well finishing down by 0.11 per cent and closed at just under €0.95. One trader said the variance between the banks was because AIB had a lot more risk attached to it than its counterpart given that it did not pass the stress test in as comprehensive a manner.

Irish Permanent also benefitted by an improved sentiment toward the banks finishing up by 3.7 per cent at €1.63.

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Ryanair closed down by 2.9 per cent, something which traders attributed to the announcement that Michael O’Leary was to sell five million shares in the company leading to speculation in the market and a subsequent fall to €3.83.

Having performed strongly earlier in the day CRH finished pretty much flat at €16.50, up a mere 0.1 per cent on the previous day. Smurfit Kappa finished up by just over 1 per cent finishing up at €7.95 while Kingspan closed at €5.56 up 1.53 per cent.

Icon was badly hit following results out today which saw it finish down 9 per cent in the US although it only finished down by half a per cent in Dublin .

Both Aryzta, which closed at €30.48 and Kerry Group, which closed at €24.55 were down on the day by 2.7 per cent and 1.4 per cent respectively.

European shares rose to a five-week closing high as strong results from UBS boosted banks, but more than half the market's early gains were erased after data showed a drop in US consumer confidence.

The FTSEurofirst 300 index of top European shares advanced for a sixth straight session to finish 0.5 per cent firmer at 1,054.17 points, its highest close since June 21, but much lower than the index’s intra-day high of 1,061.46.

Banks raced higher, with the STOXX Europe 600 banking index rising 4.7 per cent, after UBS posted second-quarter net profit well above forecasts. The sector was also boosted by a scale-back of looming capital reforms and a longer timeframe to implement changes.

UBS surged 11 per cent, while Societe Generale, Barclays and Credit Agricole rose between 7.7 and 10.6 per cent.

European shares erased a significant part of earlier gains after data showing US consumer confidence sank in July to its lowest since February, underscoring the slow path to economic recovery. US home prices rose in May but without signs of a sustained rebound.

Among oil stocks, BP slipped 2.6 per cent. It unveiled a $17 billion quarterly loss due to the costs of the Gulf of Mexico oil spill, but launched a plan to repair its battered image, ditching its chief executive and promising to slim down by trebling an asset sale target to $30 billion.

The Euro STOXX 50, the euro zone's blue chip index, was up 1 per cent at 2,769.31 points. It faces the next near-term resistance at around 2,805 points - its 200-day moving average and a 61.8 per cent Fibonacci retracement of a fall from a high in April to a low in May.

Across Europe, the FTSE 100, Germany's DAX and France's CAC 40 rose 0.2 to 0.8 per cent, while the Thomson Reuters Peripheral Eurozone Countries Index was up 1.8 per cent.