A growing belief that the interest rate environment at home and abroad will remain benign gave financial shares a boost yesterday, although the gains in the sector were not uniform. Dealers said recent views from European central bankers on the positive outlook for the euro and the prospect of rates staying unchanged for some time had helped allay fears about financial stocks. The Irish Central Bank governor, Mr Maurice O'Connell, and his French counterpart, Mr Jean Claude Trichet, both said earlier this week that the next rate move was some way off.
Investor sentiment towards the two big banks tends to switch back and forth between AIB and Bank of Ireland at regular intervals. But at the moment Bank of Ireland is the centre of attention, with the shares trading up another 45 cents to €18.60 (£14.65) yesterday while AIB drifted 15 cents lower to €13.75 (£10.83) in some chunky trading. Little attention was paid to the news that AIB is in line to buy 80 per cent of Bank Zachodni in Poland. Elsewhere, financials were generally firmer, with Anglo Irish up 3 cents to €2.55 (£2.01) while Irish Life & Permanent was unchanged on €12.05 (£9.49).
Among the industrials, more positive broker comment helped CRH to gain 4 cents to €17.84 (£14.05) while Ryanair matched its recent high with a 30-cent jump to €8.90 (£7.01). Fyffes was 2 cents higher on €2.02 (£1.59) as it appointed a new London broker, replacing WestLB Panmure with HSBC. Barlo jumped 7 cents to €0.88 (£0.69) after good full-year results while DCC recovered from recent losses and was 5 cents higher on €8.00 (£6.30). Greencore gained 10 cents to €3.45 (£2.72), Irish Continental added 15 cents to €13.00 (£10.24) while Smurfit gained 6 cents to €2.40 (£1.89).
There was little change in the Irish stocks on the New York markets, but Elan continued its recent modest recovery while there was modest demand for technology shares like Iona, CBT and Saville.
