Elan climbs on Johnson deal

Pharmaceutical group Elan saw its share price move 19 per cent in the right direction today, providing the big story of the day on the Iseq index.

Elan's stock shot up in value after it was announced that US drugmaker Johnson & Johnson is to take an 18.4 per cent stake in the company for $1 billion as part of a deal under which it will take over some of Elan's research into the treatment of Alzheimer's disease. The stock closed at €5.70, up 91 cent on high volumes, with one Dublin-based trader describing the deal as "very positive news for them".

The performance of Elan, which comprises 7 per cent of the index in terms of its market capitalisation, helped the Iseq outperform other European indices on a generally poor day.

Disappointing jobs news emerging from the US in the form of subdued non-farm payroll data dragged down sentiment in Europe. The Iseq slipped almost 1 per cent, but this was better than the 2.5 per cent fall on the FTSE 100 in London.

Building materials group CRH dropped 2 per cent to close at a price of €15.53. But this was actually a good performance relative to its peers in the sector, following news that US construction spending fell back in May and was down almost 12 per cent in the first five months of 2009 compared to 2008.

The global stock markets showed little mercy to recession-struck airlines, with the likes of Lufthansa, British Airways and Air France all losing ground. Ryanair didn't escape the carnage and plunged 4.6 per cent to a closing price of €3.18.

Some of the food stocks such as Aryzta, C&C, Glanbia and Kerry managed to finish the day with gains, but the financial stocks all fell back, with Bank of Ireland the biggest casualty, dropping 8.2 per cent to €1.52.