The Irish market underperformed its European peers today, falling by 39.84 points, or by 1.6 per cent, to 2,525.75. It was a day of “pretty violent swings”, as one broker saw it, as the Irish market opened up in the morning, tracking gains in the Asian and European markets, before falling back in afternoon trading.
Financial stocks remained turbulent, amidst fears that failing global hedge funds will be forced to liquidate their positions, leading to a sell-off in financials. In addition, the market remains concerned about the outlook for Irish banks and whether or not there will be mergers or recapitilisations, and according to one broker, "until there is clarity banks will remain under pressure".
Irish Life & Permanent bounced off its previous day's lows following its disclosure that it had a €74 million exposure to Icelandic banks, and at one point soared by 40 per cent. However, it fell off sharply later in the day to close down by 5 cent, or 3.3 per cent, at €1.47.
National Irish Bank's announcement that it would incur a bad debt charge of €69 million in the third quarter of the year due primarily to losses in the building and development sectors, saw Anglo Irish Bank's share price suffer. The stock closed down by 28 cent, or 19.9 per cent to €1.13, and was also hit by speculation that Sean Quinn would move to sell his holding in the bank.
Bank of Ireland was off slightly on the day, closing down by 2 cent, or 1.5 per cent to €1.36, with AIB the sole bank that finished in positive territory. It advanced by 2 cent, or 0.6 per cent, to close at €3.17.
Ryanair finished the day down 14 cent or 5.6 per cent, as German airline Lufthansa issued a profit warning. The stock has performed very strongly recently, leading some investors to cash in their profits.
McInerney suffered after UK builder Persimmon said that property prices would fall twice as fast as predicted in the second quarter, and it lost 6 cent, or 20.1 per cent, to close down at €0.23.
C&C was also under pressure on the day, and it dropped back by 7 cent, or 6.0 per cent, to close down at €1.02.
Paper and packaging group Smurfit Kappa was one of the stronger performers, coming off a low base to add 7 cent, or 6.0 per cent, to finish the day up at €1.16.
In the UK, better than forecast results from oil producer BP and insurance giant Aviva, saw the FTSE 100 advance for the first time in three days, as it climbed by 73.79 points, or by 1.9 per cent, to 3,926.38. BP closed up by 5.4 per cent, while Aviva finished up 5.6 per cent.
Stocks also rose in Europe, with the Dow Jones Stoxx 600 finishing up 2.3 per cent at 199.44. In France, the CAC 40 also ended the day in positive territory, up by 1.6 per cent, while in Germany, a stellar performance from car manufacturer Volkswagen saw the DAX close up by 9.9 per cent.
Although US consumer confidence sank to its lowest level on record, down from 61.4 in September to 38.0 this month, US stocks rallied, with analysts attributing the rebound to "bottom fishing", as investors looked to take advantage of the lowest stock valuations in two years. By 11.43 am, the S&P 500 had advanced by 13.49 points, or 1.6 per cent, to 862.41, while the Dow Jones Industrial Average gained 156.59, or 1.9 per cent, to 8,332.36.
