The effects of the Irish bail-out
Ireland’s bail-out by the International Monetary Fund and the EU last week hit the stock market in general, and prices have continued to fall since the news. On 29 November the FTSE was down 129.88 points, or 2.3%, on the previous Monday.
One of the biggest fallers was Aviva. Its stock closed at £3.59 on 29 November, down 8.6% on the previous Monday’s £3.93, despite an upgrade to ‘buy’ from stockbroker Jefferies on 23 November. Fellow UK insurer RSA’s stock also fell, by 3.3% to £1.20.
Both Aviva and RSA have Dublin-based subsidiaries, whose financial strength and debt ratings were placed under review for a possible downgrade by Standard & Poor’s following the rating agency’s decision to cut Ireland’s sovereign debt rating to A from AA-.
Despite its Irish tax domicile, Beazley’s share price fall over the same period was relatively small, at 2.5%.
Market indices Movers price 7-day Currency
FTSE 100 5,550.95 RSA 120.30 -3.30% Dollar 1.56
FTSE 250 10,689.60 Beazley 112.10 -2.52% Euro 1.18
FTSE All-share 2,874.78 Hardy 285.00 -1.04% Yen 130.91