Iseq gains despite IMF warning

The world economy is "in a dangerous place" the International Monetary Fund said this morning in its global outlook - not that you would know it from looking at the gains achieved on European markets.

Only the thin trading volumes betrayed signs of the lack of conviction permeating each lift in market values.

The Iseq closed up 1.5 per cent, as the FTSE, the French Cac and the German Dax all climbed between 2 and 3 per cent.

There was an edgy opening to proceedings as investors absorbed the overnight decision by the credit rating agency Standard & Poor's to downgrade the rating on Italy's sovereign debt.

But equities overcame the jittery start and began to stage a slow recovery across the board, despite little concrete reassurance on the still unfolding Greek drama.

There was little newsflow in relation to the Irish stocks, with the Dublin market moving in tandem with investors' macro-economic concerns. Although most stocks closed higher, Bank of Ireland continued the weak streak of the last few days and there were enough sellers in the stock for it to go against the market trend, finishing down 2.7 per cent at 7 cent.

Paper and packaging group Smurfit Kappa "seemed to be in favour", a Dublin-based dealer noted, with the stock climbing 15 cent to €4.80, a rise of 3.2 per cent.

Building materials group CRH, the largest stock on the index, advanced almost 3 per cent to €11.74, while pharmaceutical group Elan was one of the biggest climbers, rising 4.6 per cent to €7.45, up 33 cent.

There was mixed news in the airline sector, as the International Air Transport Association raised its 2011 forecast for global airline profits, but German airline Lufthansa cut its 2011 outlook, citing weak August data. On the Iseq, Ryanair rose 1.1 per cent to €3.06, while Aer Lingus closed up 3 per cent at 68 cent.