Bank of Ireland overcomes election pall as shares soar 8%

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Bank of Ireland overcomes election pall as shares soar 8%
Bank of Ireland overcomes election pall as shares soar 8%

Bank of Ireland shares soared 8% and Irish property companies clawed back some of their sharp losses after the election as global markets climbed.The global surge in stocks and the price of crude oil came as investors decided that the threat of the coronavirus to world economic growth was past its peak.
“The past 10 years have seen a host of crises, about which much ink has been spilled. While the economic impact on China will take months to calculate, and is certainly not yet fully apparent, it does look like investors have decided the virus is no longer a threat,” said IG chief market analyst Chris Beauchamp.Stock indices across Europe and the US rose, while crude oil gushed $1.90 higher to reach over $55.90 a barrel.And shares in cruise operators Royal Caribbean and Carnival rallied in London, although the companies continue to be in the frontline of the virus threat.IAG, the British Ariways, and Aer Lingus owner, also gained by over 1.5%.The global surge spread into Ireland where Bank of Ireland climbed 8% in a huge move seen as a response to its shares having been oversold this week.A clutch of Irish shares with links to property, including the banks, had been hard hit in recent days amid investor concerns that potential rent freezes and a hike in commercial property stamp duty will be promoted by any new Sinn Féin-led coalition in government following the party’s sweeping electoral gains.Housebuilders Glenveagh Properties and Cairn Homes rose 5% and 3%, while office landlord Hibernia Reit increased 1.5%.However, the Irish stockmarket-listed housebuilders and property firms had notched up significant declines this week, which come on top of falls for some that have been linked to Brexit in the last three years.Business group, the Construction Industry Federation said it is organising meetings with TDs in the coming weeks.Its affiliated group, the Irish Homebuilders Association wants to tell TDs “about the specific challenges preventing homebuilding in their areas”, saying there are barriers preventing firms from building new homes.
Meanwhile, S&P Global Ratings said it expects that household spending will help the European economy to withstand the potential slow down in world growth caused by the coronavirus, even as Germany remains most vulnerable.“For now, sentiment indicators are bottoming out and financial conditions — credit spreads and equity markets — do not suggest that the coronavirus will cause a big shock to the European economy,” said S&P chief economist in Europe, Sylvain Broyer.“The relatively small hit to growth that we currently expect should be quickly overcome, not least owing to the resilience of domestic demand,” he said.However, Capital Economics in London predicted that the coronavirus outbreak would hit hard at economic output in China.“China’s economy is likely to contract sharply in the first quarter, as a result of the measures that have been taken to limit the spread of the new coronavirus,” the economics consultancy said.“But a slower recovery that would have larger and more prolonged effects cannot be ruled out until activity has started to return to normal,” it said.
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Source: Business News