Banks take another hit on bleak day for Irish market

DUBLIN REPORT: Iseq:2,706.65 (–40.14) Settlement date:September 22nd

IT WAS a torrid end to the week in Dublin, as reports that Ireland may need to seek IMF help proliferated at home and abroad.

While the Department of Finance strongly rejected the suggestion – which traders said stemmed from media reporting on Thursday’s Barclays Capital report on the Irish economy – Irish equities as well as the debt markets were shaken, according to Dublin traders, who described the trend as extremely worrying.

The Dublin index underperformed in comparison to its European peers, closing down 40 points, or 1.5 per cent.

Bank stocks took the biggest hit, although this was to some extent due to index reweighting, which saw AIB fall out of Euro Stoxx 600 by close of business yesterday. AIB shed 11 per cent to close at €0.62. Bank of Ireland lost 7 per cent, closing just under €0.62 , although it did see decent volume towards the close due to the implications of the sector reweighting on the stock.

Irish Life & Permanent also closed 3.7 per cent down at €1.55.

Elsewhere, there was little news to direct the flow of the index. Almost all stocks closed in negative territory, as Ireland took a bashing on the bond markets and the cost of borrowing continued to escalate.

Index heavyweight CRH lost 1.5 per cent to €12.18 and was one of the worst performers among its sector peers in Europe.

Drinks company C&C saw significant activity, but it too ended in negative territory finishing just over ½ per cent down at €3.17.

Elan closed down 1 per cent at €3.71, following news that the high court proceedings involving the biotech firm and two of its directors had been suspended, after the board of Elan accepted a report which found no legal breaches by Elan management. The two independent directors have said they would resign within 90 days.