FINANCIAL shares felt the brunt of the poor sentiment on the Irish market yesterday, with the financial index falling 2.6 per cent as plunging bond prices and renewed weakness on Wall Street took effect.

With US treasury bonds falling by almost a point to a yield of over 6.7 per cent and with Irish gilt prices falling between 15p and 30p, the yield sensitive financial shares fell sharply. Some dealers were surprised at the scale of the selling and Bank of Ireland, in particular, was sold heavily out of London where 2.4 million shares changed hands.

In Dublin, the bank's shares closed down 14p on 410p in heavy trading - one deal at 414p is thought to have involved a line of over a million shares. AIB was also heavily sold and closed down 10 on 315p.

Both stocks were still drawing offers at their closing levels. Other financials were less active with Woodchester down 9 1/2p on 185p while Irish Life lost 1p to 240p after reaching 246p in earlier trading.

The falls by the financials came as New York traded 30 to 50 points lower from Monday's close and before a wave of selling drove the Dow down almost 100 points before New York lunchtime. Further falls may be in the offing in today's trading with no sign yesterday of any support level being reached by the financials.

But while the financials tumbled, industrial stocks were firmer and Smurfit dealt in sizeable trading to close up over 6p on 158 1/2p. Cyclical stocks like Smurfit are likely to benefit from the strengthening US economy signalled by the employment figures of last Friday.

CRH was also in better shape, closing up 4p on 531p while Greencore was once again the focus of heavy demand in both Dublin and London, closing up 14p in Dublin on 304p and up 9p in London on 314p sterling. The share is well supported at these levels with strong bids at 300p.

The second liners involved in bids were weaker with James Crean down 8p on 235p and DCC down 6p on 242p.