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Monday 03rd of January 2011
December 17, 2010    

Bank of Ireland drops 14 percent after Ireland’s credit rating cut

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by Elaine Frei
Bank of Ireland drops 14 percent after Ireland's credit rating cut

European equities markets were lower after Moody’s Investors Service cut Ireland’s credit rating from Aa2 to Baa1, which rekindled concerns about Europe’s debt problems.

The cut sent Irish banks lower, with Bank of Ireland (ISEQ: BKIR) falling 14 percent while Allied Irish Banks (ISEQ: ALBK) dropped 1.1 percent.

The FTSE 100 was down 0.16 percent to 5,871.75 in London, but the FTSE 250 added 0.86 percent to 11,426.8 on big gains for an oil company and in the travel and leisure sector.

The biggest decline on the 100 came from drug maker AstraZeneca (LSE: AZN) after it failed to get US approval for a blood thinner it developed as the US Food and Drug Administration asked for further analysis of the drug.

Also fueling declines on the index were declines for banks, with Lloyds Banking Group (LSE: LLOY) down 3.57 percent on charges related to Irish loan losses while Royal Bank of Scotland Group (LSE: RBS) was 5.73 percent lower.

The 250 was up after oil and gas explorer Melrose Resources (LSE: MRS) added 13.81 percent.

Additionally, events organizer ITE Group (LSE: ITE) gained 11.82 percent after it bout another events group.

Rounding out the list of top five gainers on the 250 were three constituents of the travel and leisure sector, led by Punch Taverns (LSE: PUB), which was up 11.7 percent on a report that sales in its managed-pubs division are up, followed by auto rental agent Avis Europe (LSE: AVE) with a gain of 9.97 percent while transport company National Express Group (LSE: NEX) was 6.87 percent higher.

Retailers led the 250 lower as JD Sports Fashion (LSE: JD) dropped 5.18 percent and consumer electronics retailer Dixons Retail (LSE: DXNS) was down 4.47 percent.

The best performer on the 100 was Autonomy Corporation (LSE: AU), which added 5.32 percent on rumors that both Microsoft (NAS: MSFT) and Oracle (NAS: ORCL) could offer bids for the software group early next year.

The FTSE Eurofirst 300 was down 0.46 percent to 1,126.14 while the CAC-40 was down 0.54 percent to 3,867.35, the Dax was 0.6 percent lower to 6,982.45 and the IBEX dropped 1.12 percent to 9,898.1.

Markets in the Asia-Pacific region were mixed to end the week.

The Nikkei 225 was 0.07 percent lower to 10,303.8 in Tokyo, while the Topix index fell 0.08 percent to 903.14 but the Mothers market added 0.49 percent to 425.99.

The automobile manufacturing sector fell on a prediction that new car sales will drop by nearly 10 percent in 2011, with Toyota Motor (TYO: 7203) down 0.9 percent while Suzuki Motor (TYO: 7269) dropped 1 percent and Nissan Motor (TYO: 7201) was 1.5 percent lower.

Traders lost ground after oil and metals prices declined, sending Mitsubishi Corp (TYO: 8058) 1.1 percent lower, while Sumitomo Corp (TYO: 8053) fell 1.3 percent and Mitsui & Co (TYO: 8051) was down 2.2 percent.

The real estate sector saw gains as the Bank of Japan began buying REITs, with Mitsubishi Estate (TYO: 8802) up 1 percent.

Sharp (TYO: 6753) added 2.5 percent on a media report that it will spend ¥100 billion ($1.2 billion) to install a production line to make LCD screens for Apple’s iPhone.

Other decliners in the region included the Shanghai Composite, which was down 0.15 percent to 2,893.74, while in Australia the Sydney Ordinaries dropped 0.32 percent to 4,853 and the S&P/ASX200 was 0.44 percent lower to 4,763.1.

Gainers included the Straits Times Index, which was up 0.17 percent to 3,153.01 in Singapore, while Hong Kong’s Hang Seng added 0.2percent to 22,714.8, the Taiex was 0.41 percent higher to 8,817.9 in Taiwan, South Korea’s Kospi was up 0.85 percent to 2,026.3 and the Sensex gained 1.1 percent to 19,864.8 in India.

New York markets were mixed in early afternoon trade, with the Dow Jones Industrial Average down 0.1 percent to 11,487.2, while the S&P 500 had added 0.12 percent to 1,244.4 and the Nasdaq Composite was up 0.4 percent to 2,647.86.

Crude oil prices were up slightly at early afternoon in New York, while at the same time metals prices were also higher.

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