Financials take another hit on bleak day for market

Iseq: 2,873.20 (–44.38)

THE ISEQ index of Irish shares fell 1.5 per cent in trading yesterday, on a day in which European stocks suffered their worst performance in three weeks.

A threat by credit ratings agency Moody’s to downgrade Greece’s sovereign debt dragged down sentiment, as did the release of US jobless claims and manufacturing orders that fell short of forecasts. Shares trading on the Dublin market declined in line with falls of 1.2-2 per cent on the major European indices. “There is a lot of red out there at the moment,” noted one Dublin-based dealer.

The financial stocks attracted higher volumes than on previous days, with the uncertainty regarding the transfer of troubled loans to the National Asset Management Agency (Nama) continuing to weigh on the share prices of AIB and Bank of Ireland.

For the second consecutive day, AIB closed at a price below the psychologically important €1.00 mark, finishing at 98 cent. Bank of Ireland was one of the day’s heaviest fallers, dropping 5 per cent to €1.01. Meanwhile, Irish Life Permanent, which is not affected by Nama, also fell in trading, closing down 3.5 per cent at €2.82.

Aer Lingus was one of the few climbers on the day, rising 2.7 per cent to 57 cent as investors responded positively to news of cost-cutting at the airline.

A submission lodged at the Office of Fair Trading (OFT) in relation to Independent News Media’s sale of the London Independent titles to Evening Standard owner Alexander Lebedev suggested that group’s off-loading of the loss-making titles is now imminent. Independent News Media fell 5.5 per cent in trading to close at 8 cent.

Food group Kerry made gains, adding 7 cent to close at €23.60 following an upgrading on its projected 2010 and 2011 earnings by analysts at Davy stockbrokers.

Settlement date: March 2nd