Caution remains the watchword in global stock markets as the recent turbulence in Asia, growing worries about the Japanese economy and tension between Iraq and Washington ensure that many investors stick warily to the sidelines.
After the recent drubbing suffered by the south-east Asian markets and Hong Kong, attention is now turning northward to Tokyo where the key Japanese share index has lost 8.8 per cent in the last six days of trading.
It briefly crashed below the 15,000 point level for the first time in more than two years yesterday, as the market gave a cold shoulder to Japanese government proposals to kickstart its stalled economy.
Investors and officials in the US and Europe are increasingly worried about the impact on western economies of the Asian slowdown and will be keeping a very close watch on how things pan out. Federal Reserve Chairman, Mr Alan Greenspan told the US House Banking Committee during the week that the turmoil in Asia could hurt US export growth.
"To date, the direct impact of these developments on the American economy has been modest but it can be expected not to be negligible. Depending on the extent of the inevitable slowdown in growth in this area of the world, the growth of our exports will tend to be muted," he said.
The Irish market ended largely unchanged in a week that was characterised by strong performances from one of Ireland's largest quoted financial companies and one of its mining minnows.
Bank of Ireland was the star performer of the week, rallying to an all-time high of 910p after surprising the market with better-than-expected results on Thursday.
Pre-tax profits of £250.7 million, a 30 per cent increase on the first half of last year, were some 10 per cent above the highest forecast, and were rewarded with a 41p rise in the share price before some profit-taking took it back down to close the week at 885p.
Analysts have upgraded their full-year forecasts and now expect the bank to make profits of up to £520 million in the year to March 1998. Meanwhile, gold fever was behind the rise in the shares of mineral exploration group, Minmet to a high of 8.25p after the company confirmed it had made a gold find in Devon.
The gold levels have been found by Minmet's 75 per cent-owned subsidiary, Crediton Minerals, after a lengthy phase of exploration drilling. Minmet has said that further work will need to be done to investigate the exact gold enrichment and its mineralogical associations.
Irish industrial stocks continued to lag behind their banking counterparts, enduring a generally dull week despite strong results from Ryanair and DCC.
The results failed to do much for the Ryanair share price, which lost 21p to 314p in the week but DCC jumped 10p and analysts expect to see it move back up toward the all-time high of 465p seen earlier this year.
"A 15.5 per cent post-tax return on capital, consistent free cash generation equivalent to 40 to 50 per cent of operating profit and proven strategy suggest the shares are still cheap even after the rerating of the last two years," UBS said in a research note.
