Iseq closes 0.3 per cent higher

The Iseq rose just 0.3 per cent on another topsy-turvy day on the Irish stock market as shares performed well in the morning but fell away in the afternoon.

One trader reported lower trading volumes, about 40 per cent below average, and that a “staggering” number of clients had left for the Christmas holidays, making off with any gains that they bagged in November.

Bank of Ireland climbed 2.5 per cent after the bank reported yet another disposal as part of its deleveraging of the bank with the sale of its asset-based lender Burdale for a €690 million gain.

The only Irish bank still trading on the main stock market ended the day down 3.8 per cent or a third of a cent at 7.5 cent a share after a wild swing driven by light trading volumes.

Elan rose 3.1 per cent or almost 30 cent to ¤9.44 after upgrade by Deutsche Bank and rumours circulating in the afternoon that it may be the subject of a $16 (€12.30) a share bid from pharmaceutical giant Bristol-Myers Squibb.

Building materials group CRH rose 3 per cent or 41 cent to close at €13.80 on the Irish bourse on its first day of trading on the FTSE where it fell 0.2 per cent to £11.53 on its debut on the UK market.

Food group Greencore rose 5.1 per cent to 66 cent, while Kerry Group fell 2.1 per cent to ¤27.65.

Industrial services group DCC declined 1.2 per cent or 22 cent to €18.30 on concerns that its retail distribution business SerCom may be affected by the downturn in consumer sales reported by HMV which issued a profit warning.

Aer Lingus fell 1.5 per cent despite news of Etihad Airways increasing its stake in Air Berlin leading to speculation that the Middle Eastern airline may want the Irish carrier’s Heathrow slots.

European shares edged higher in thin trade, though strategists said that worries about the effects of the euro zone sovereign debt crisis would cap any further gains in the short term.

The FTSEurofirst 300 index of European shares rose 0.1 percent to close at 957.45 points, going as high as 966.10 and as low as 949.99 in choppy trade.

Volume was very low ahead of the holiday season at just 62.4 per cent of the index’s 90-day average.

Banks dragged London’s leading shares index lower after British chancellor George Osborne said he would push through plans for a radical industry shake-up.

Mr Osborne said he had accepted the key recommendations of the Independent Commission on Banking’s report, which includes requiring banks to ring-fence their retail and investment arms.

This, and continued gloom over the eurozone, hit banking shares and saw the FTSE 100 Index fall 22.4 points to 5365.

Lloyds fell 1p to 23.5p, and Barclays was off 5.5p at 166p. Shares in RBS, which is 83 per cent owned by the taxpayer, were hit as Osborne said that it would further scale down its investment banking arm and focus more on the UK. Its shares were down 0.6p at 19.4p.

The pound was up at 1.19 against the euro after the single currency was knocked after European Central Bank president Mario Draghi said Europe’s economic outlook is subject to “high uncertainty”and that the law forbids him from stepping up government bond purchases.

US stocks fell, while Treasuries and the dollar rose. The Standard and Poor's 500 Index slipped 0.6 percent to 1,211.83.

Markets were hit by uncetainty over whether eurozone leaders would reach agreement on how to raise money for its bailout fund.

Asian stocks fell overnight as news of the death of North Korea’s leader Kim Jong Il fuelled uncertainty facing the regions’ markets.

South Korea’s Kospi index fell by more than 4 per cent at one point while the threat of increased instability meant the Korean won slumped against the traditional safe haven of the US dollar.