Iseq set for worst year since 2010 Troika bailout

The Iseq index of Irish shares is on track to post its first annual decline since 2010 – the year that the State was forced into an international bailout. While the benchmark has rallied almost 23 per cent from its post-Brexit lows, it remains down 4.4 per cent from where ended in 2015, with only a day and a half of trading before 2016 draws to a close. The Iseq fell by 0.4 per cent to 6,490.69 points on Wednesday.

"Over the course of 2016, the Iseq underperformed the broader European market held back by the overplayed view that Ireland would suffer from UK's decision to leave the European Union, " said Gerard Moore, head of equity research at Investec in Dublin.

While Irish shares were caught up in global volatility early in the year, amid heightened concern about the Chinese economy and emerging markets, the Brexit vote sent stocks into freefall, with Irish companies affected particularly by a slump in the value of sterling against the euro. However, rising expectations that incoming US president Donald Trump will push through a massive stimulus plan next year has reignited expectations of economic growth and inflation has served to lift stocks globally.

Ireland’s largest publicly quoted company CRH’s US division is expected by analysts from Davy to Goodbody Stockbrokers to be a key beneficiary of expected motorway and other infrastructure spending.

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LONDON

The FTSE 100 in London is up 13.8 per cent on the year, having reached an all-time closing high on Wednesday, with exporting companies that dominate the blue chips index, including British American Tobacco, GlaxoSmithKline and Diageo, benefiting from sterling weakness. Meanwhile, a surge in oil prices in the latter part of the year has buoyed index heavyweights, Royal Dutch Shell and British Petroleum.

The pan-European Stoxx 600 index is on track to end the year in negative territory, currently down 1.2 per cent from its position at the end of 2015. Italy’s FTSE MIB index stands out as a weak spot, falling 6.5 per cent, amid concerns over its ailing banking sector and wider economy.

Over on the other side of the Atlantic, the Dow Jones Industrial Average has been hitting record highs on a regular basis since Mr Trump’s election in November, although the stock has failed, so far, to hit the key psychological 20,000-point level. It was within 26 points of the mark on December 20th.