DUBLIN REPORT: Iseq: 2,878.67 (-80.58) Settlement date:August 16th

THE ISEQ spiralled downwards in line with its European peers yesterday, as macro-economic concerns spooked investors.

The US Federal Reserve downgraded its economic outlook on Tuesday, and the reverberations were felt through European bourses yesterday.

Banking stocks led European markets lower, but Bank of Ireland bucked this trend despite reporting a pretax loss of more than €1.246 billion in the six months to June.

Although the stock fell by about half a per cent to 84 cent, this compared relatively well to a drop of over 3 per cent across the sector in Europe.

“There was nothing really to be particularly disappointed or happy about in the numbers,” one Dublin broker said.

AIB also fared better than many European banks, shedding a little over 1 per cent – just one cent – to 85.5 cent.

The relative outperformance by the two banks was notable given the underperformance in Irish bonds yesterday, he added.

“It’s surprising to see Irish banks do well when the Irish sovereign is weaker, as the Irish sovereign is backing the Irish banks,” he said.

All economically-sensitive sectors found themselves under pressure. Airlines struggled, with Aer Lingus and Ryanair slipping seven cent and almost 17 cent to 90 cent and €3.73 respectively.

In the construction sector, CRH lost almost 70 cent to close at €15.51.

Elsewhere, packaging group Smurfit Kappa failed to get much uplift from a strong set of quarter two results released yesterday. The stock closed at €7.65, down about 2.5 per cent, or 19 cent.

Health services provider Elan, which announced the purchase of healthcare communications company InforMed, was off 3.6 per cent at €3.90.