MARKET REPORT:DESPITE A rally from financial stocks, the Irish market closed down 3.1 per cent yesterday, as drugs manufacturer Elan lost a third of its value.

In a day when domestic news weighed heavily on the Iseq, the index fell by 143.18 points to close the day at 4,441.86.

Better than expected results from AIB saw financial stocks rally, but Elan fell by 31.8 per cent, or by €6.54 to €14.02, after detailed clinical trial results for its new Alzheimer's disease drug proved mixed.

The decline in Elan's value saw it topple from its position as the largest stock on the Iseq index in terms of market capitalisation, and it is now the third largest stock.

AIB announced better than expected results yesterday, as well as an increase of 10 per cent in its dividend, causing the stock to rise by 6.8 per cent, or by 50 cent, to close the day at €7.85. Boosted by AIB's news, the other financial stocks also rose. Anglo Irish Bank closed up 6.4 per cent, or by 34 cent, to €5.59, while Bank of Ireland finished the day up 3.1 per cent, or by 16 cent, to €5.39.

Irish Life Permanent shrugged off concerns over its funding base when it confirmed that it had refinanced €3 billion of debt coming due this year.

The market reacted positively to the announcement, leading the stock to jump by 11.7 per cent, up by 54 cent to €5.15.

It was also a good day for paper and packaging firm Smurfit Kappa, which increased by 6.9 per cent to close the day at €3.67, up 24 cent.

CRH was upgraded by Lehman Brothers, and this saw its share price jump 5.2 per cent, or by 83 cent to €16.79. Kingspan also gained, closing up 5.1 per cent, or 30 cents, to €6.23.

On the downside, Ryanair saw its value decline by 4.4 per cent, or 12 cent, to €2.49.

Iseq: 4,441.86 (-143.18) Settlement date: August 4th