It was all about the banks today, as investors responded positively to new capital requirements for the sector, and AIB’s Polish disposal.
Banking stocks fared well across Europe, rising between 2 and 3 per cent. This followed the announcement of higher capital hurdles for banks globally by the Basel Committee on Banking Supervision. According to a Dublin-based broker the requirements and the timelines announced contained no negative surprises, and as a result banks in general enjoyed a positive session. As usual this sectoral movement was amplified on the Irish stock exchange.
Irish Life & Permanent was the star performer, rising 6 per cent to just under €1.70, while Bank of Ireland gained 5.4 per cent to finish a shade under 72 cent.
AIB also attracted positive attention, having announced the disposal of its Polish interests on Friday. The stock hit 82 cent at one point, but slipped back to close at just over 78 cent, a daily gain of almost 5 per cent.
“There is a bit of money chasing a bull market that a lot of people haven't believed in,” one broker said, noting that the US market had a strong run last week. “People who have to be involved are putting money to work and looking for stocks that will outperform, so money is going into [Irish banks].”
Overall the Irish market was fairly strong today, with the Iseq index gaining more than 1 per cent.
Financial software provider Norkom was one of the few fallers on the day, plunging as much as 30 per cent after issuing a profit warning this morning. It recovered somewhat by the close but was still down 24 per cent, or 30 cent, at 95 cent.
Elsewhere packaging giant Smurfit Kappa fared well, rising more than 2 per cent to just under €7.67.
Across Europe, France's CAC 40 gained 1.1 per cent and the UK's FTSE 100 rose 1.2 per cent, while Germany's DAX Index gained 0.8 per cent.
Additional reporting - Bloomberg