THE STATE’s two largest banks suffered heavy losses on the Irish market yesterday, as financial equities bore the brunt of global market carnage.
AIB and Bank of Ireland have now lost roughly 98 per cent of their value over the last year.
Bank of Ireland tumbled more than 30 per cent yesterday to €0.125. Its share price 12 months earlier stood at €9.15. AIB slid 21 per cent to €0.27, compared to €13.29 a year ago.
The Iseq overall index fell 4.5 per cent, almost 100 points, to 2,019.39.
The major US indexes traded around 12-year lows while a key index of leading European shares set a fresh lifetime closing low.
Worries about the US financial system’s health hit bank stocks again and investors fretted about the possibility that the embattled finance arm of General Electric could lead to a ratings downgrade for the entire company.
In another setback for American corporate icons, auditors for General Motors warned the once-mighty US carmaker may not survive the crisis.
GM’s stock fell about 17 per cent.
GE shares only slid 0.6 per cent but financial shares tumbled, with the SP 500 financial index falling 8.1 per cent as Citigroup sank below $1, calling into question its inclusion in the Dow Jones industrial average.
Financial shares also dragged European stocks lower after staff at the European Central Bank forecast the euro zone’s economy could shrink by as much as 3.2 per cent this year, reigniting fears of a deeper recession.
The FTSE Eurofirst 300 index of top European shares closed down 3.7 per cent to a record low of 670.72 points.
National benchmark indexes slipped in all 18 western European markets.
The United Kingdom’s FTSE 100 fell 3.2 per cent. Germany’s DAX lost 5 per cent, while France’s CAC 40 tumbled 4 per cent. – (Additional reporting: Reuters, Bloomberg)
