The long weekend hangover carried on into the Dublin Stock Exchange on Tuesday when there was little movement in share prices, except for Smurfit which saw a 7p jump to 217p on speculation that a major restructuring of the company's American operations was imminent. Its London price and the price of JS Crop shares New York rose on optimism that a restructuring would boost earnings. Smurfit, which bid well during the week, later announced that it had made a further strategic acquisition in Europe with the purchase of two corrugated box plants in Germany for £29.7 million.
By Wednesday the ISEQ had climbed again, overshooting last week's peak by over seven points, reflecting strong gains on international equity markets.
The downward turn on New York's Dow Jones early in the week, caused by pressure on blue chip stocks, was turned around as yet another record was set for the second week running by Wednesday.
In London, the FTSE-100 buoyed by BP, BAA and most of the financials cranked upwards on Tuesday. But further good corporate news and a fall in sterling allowed it to surge ahead by the close of mid-week trading to break its 5,000 barrier. After reporting strong interim figures last week, Lloyds TSB put in a strong performance while Barclays also traded profitably on the back of increased first half profits announced on Thursday. The Footsie continued to climb, with the ISEQ following, even though speculation that interest rates would not be raised by the Bank of England's monetary policy committee proved to be incorrect. The announcement of the rise of a quarter of a percentage point was tempered by the statement that "interest rates have reached a level consistent with the inflation target". The Footsie continued its climb and the ISEQ followed in tandem as industrials continued to bear fruit.
The varying fortunes of the pound continued to dominate financial news. Heavy overseas selling on Monday and Tuesday pushed it between 88p and 90p against sterling, although it emerged over 90p by Wednesday. Tuskar Resources signalled positive oil returns from its Nigerian offshore well, boosting its share price in London. Northern Ireland Electricity, which last traded in Dublin on July 4th, announced it was considering legal action over a decision by the industry regulator, Ofreg, to make the company cut is transmission and distribution prices by 29 per cent.
In broker news, Davys increased its first place share of the equity market to 36 per cent, followed by Goodbody (25.8 per cent), NCB (20.8 per cent), Riada (13.8 per cent) and Bloxham (3.7 per cent).
NCB indicated that technology stocks would become an important part of the Irish equity market index, "with several Irish technology companies having global potential".
On the same day, the announcement of an alliance between long-time rivals Apple Computer and Microsoft came as a surprise to the world. In pension funds, results showed that Eagle Star achieved a 23.2 per cent return for the half-year to June, almost four percentage points ahead of the average, with Friends Provident and Standard Life also doing well.
