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Tuesday, February 27, 2024

Irish bailout cheer fails to linger

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The FTSE 100 Index down 5.3 points to 5727.5

London’s FTSE 100 Index has failed to hold on to gains as investor cheer over Ireland’s imminent rescue package proved short lived.

The Footsie opened more than 30 points higher following news on Sunday that Ireland will accept an EU bail out, but stocks soon slipped – down 5.3 points to 5727.5 – as attentions began to focus on details of the rescue and on other debt-laden countries in the eurozone.

Futures trading suggested the Dow Jones Industrial Average on Wall Street would tick modestly higher, with investor focus also on the latest quarterly update from US technology giant Hewlett Packard.

While the bounce back was only brief on the FTSE 100, Ireland’s bail out gave commodity prices a boost, with oil prices rising to around 83 US dollars a barrel.

Blue-chip banks quickly lost early session gains despite the removal of concerns over their exposure to the Irish crisis.

Part-nationalised Royal Bank of Scotland, which is seen as being the most vulnerable in terms of Irish lending through its Ulster Bank subsidiary, fell 3% down 1.3p to 40.5p.

Shares in fellow tax-payer backed Lloyds Banking Group dropped 1.3p to 65.5p and Barclays eased 2.8p to 271.4p.

Miners provided some of the biggest gains of the session, with Vedanta Resources up 39p to 2247p.

Financial Times publisher Pearson was also making advances as the market reacted well to news of its deal to buy a 75% stake in CTI Education, a South Africa based higher education company, for £31 million. Analysts at UBS estimated the acquisition could add to Pearson’s earnings in 2011 and shares in the group lifted 12p to 942.5p,

One of the biggest rises in the FTSE 250 Index came from outsourcing firm MITIE after it announced a 12% rise in half-year profits and said it was hopeful of snapping up contracts as public sector clients look to cut costs. Shares jumped 4% or 7.5p to 208.5p.

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