With international markets drifting as profit-takers moved in after last week's solid recovery, the Irish market closed 1.4 per cent lower with the biggest losses in the major financial stocks.

The biggest fall was by Barlo, the latest stock to give the market a profits warning.

Barlo shares almost halved in value after warning once again of difficult trading conditions - the shares closed 38 cents lower on 39 cents.

Among the leaders, Bank of Ireland was hit hardest by the profit-taking and lost 24 cents to 8.47 while AIB was 14 cents lower on €9.73.

In thinner trading, Irish Life lost 18 cents to €10.62 while Anglo Irish was 16 cents lower on €3.10.

Among the industrials, Smurfit gained six cents to €1.94 as US investment group Capital continued to build a stake.

Capital - which barely featured on the Smurfit register a few weeks ago - bought another 1.05 million shares last Wednesday after the 8.7 million shares it bought two weeks ago. Capital now holds a 6 per cent stake in Smurfit.

Elsewhere, Independent continued to fall and hit a low of €1.50 before closing 12 cents lower on €1.52. This means that those investors - including chairman Sir Anthony O'Reilly - are already down 50 cents on the 51.8 million shares they bought in the recent placing at €2.02 a share.

CRH was 20 cents firmer while there was heavy trading - some 7.1 million shares - in Eircom as index funds continued to wind up their positions after Valentia declared its offer unconditional.

IAWS hit another new high with a 27 cent jump to €8.30.