Extreme volatility in the banking sector dominated Irish stock market activity today, as investors digested the Government’s grand plan for tackling problem bank loans.
The two main banks AIB and Bank of Ireland plunged in tandem during the morning session, losing more than 30 per cent of their value. However retail investors bought back into the stocks in the afternoon, and by the close they had recovered some ground.
In the end AIB was down about 5.5 per cent at €1.21 while Bank of Ireland had lost 7.25 per cent at €0.895. However this represented an impressive comeback for both banks given the wild swings earlier in day.
Irish Life & Permanent - which isn’t exposed to risky development loans - also endured a volatile session, touching €1.28 at one point, but it finished up more than 9 per cent at €1.80.
Brokers noted that several larger stocks had reasonable moves yesterday, although there was no specific newsflow behind this.
The bellwether stock of the Iseq index, CRH, had a weak opening but regained momentum over the course of the day, gaining 1.75 per cent, or 28 cent, to close at €16.28.
Ryanair also enjoyed a good day’s trading, and ticked up by 3 per cent to almost €2.96.
Cider manufacturer C&C bounced almost 2 per cent to €1.45, which brokers attributed to the fact that excise duty on alcohol wasn’t increased in the Supplementary Budget.
Bakery group Aryzta was in demand, and stormed ahead by more than one euro to finish at €20.07.
European equities drifted higher after slipping in the previous three sessions as miners advanced with a rise in key base metals prices, while financials recouped some of their recent losses.
The FTSEurofirst 300 index of top European shares closed 1.89 points higher at 762.58.
In London, the FTSE 100 ended 5 points lower at 3,925.52, notching up a fourth straight session of losses. Frankfurt's DAX index ended at 4357.92 points, up 35.42 or 0.82 per cent, while in Paris the CAC-40 index closed at 2921.06 points, up 18.75 or 0.65 per cent.
Meanwhile US stocks gained, snapping a two-day losing streak, as Pulte Homes agreed to buy Centex to create the nation's largest homebuilder and life insurers jumped on prospects of a government bailout.
The Standard & Poor's 500 Index was up 1.2 per cent to 825.4 at 6.47pm.
(Additional reporting: Reuters)