MARKET REPORT:SHARES ON the Iseq plummeted yesterday as fears over banking stocks continues to haunt international markets and uncertainty surrounds the US government's $700 billion bailout plan for its troubled banking sector.

The Dublin market was down more than 7 per cent at one stage before a bounce saw it close the day 5.95 per cent - off 236.56 points - weaker at 3,739.45.

There were very few winners on a day which saw many headline stocks sold off.

With the exception of AIB, financial stocks were in freefall for most of the day. Both Bank of Ireland and Anglo Irish Bank were trading down 17-18 per cent at one stage before a small bounce at the end of the day brought them off their lows.

Bank of Ireland ended the day 13.65 per cent weaker as it shed 64 cent to €4.05 with around 14 million shares traded.

Anglo Irish saw 13.19 per cent wiped off the value of its share price as it dropped 62 cent to €4.08. Irish Life Permanent fell back 33.6 cent to €6.06.

However, AIB bucked the trend among banks and was nearly 3 per cent better off at €6.07 by the time the market closed.

Brokers said the gains reflected a view among some investors that the stock is now undervalued compared to its peers.

Although oil fell back from Monday's record one-day gain, it was still having an effect on some stocks.

Ryanair, which said earlier in the day that it remained unhedged for its fuel needs beyond the end of this year, saw 7 cent shaved off its share price to close at €2.48.

Around 11 per cent was knocked off Smurfit Kappa's share price as it shed 46 cent to €3.59.

The market was not helped by the fact that CRH received a downgrade from Merrill Lynch yesterday, ending the day at €15.50, a drop of 8.2 per cent or €1.39.