Another bad day for banks as investors fear recession

MARKET REPORT:IT WAS another bleak day on the Irish Stock exchange, with low volumes in sales and those share deals that did occur leaving the Iseq index down.

Financials generally did poorly, reflecting what happened to their fellow banks around the globe as investors worried about global recession.

Irish Life and Permanent did particularly poorly as a result of rumours that it was going to drop out of the MSCI World Index, a reputable index of world stocks. Falling out of the index would prompt funds to sell the stock, and as a result its share price fell 20.39 per cent, ending the day at €2.07.

AIB ended the day down 8.33 per cent, at €3.30, while Bank of Ireland ended down 2.01 per cent, at €1.51. Anglo Irish fell 1.66 per cent, to €2.01.

Cement Roadstone Holdings issued a statement saying its full-year pre-tax profit would decline by a low- to mid-teens percentage rate, worse than the 10 per cent fall anticipated in August.

But many investors thought the news was better than it might have been, and were also encouraged by the group's announcement that it plans to strengthen its balance sheet with measures such as reining in acquisitions and capital expenditure. The share price ended the day up 3.49 per cent, at €17.19.

Similarly, Aer Lingus had a good day in the circumstances after it announced it expected to suffer a full-year operating loss of €20 million.

This was less than had been expected for the airline, and its share price ended the day up 0.84 per cent, at €1.20.

Ryanair, by contrast, saw its share price drop 5 per cent, to 2.85. This was more typical of airline stocks around the world yesterday, as dropping fuel prices were more than cancelled out by fears of recession.