Iseq follows rest of European markets lower

DUBLIN REPORT: Iseq: 3,036.69 (-59.47) Setlement date: September 4th:IT WAS a red day across European markets yesterday, with the Iseq index of Irish shares capitulating to the negative mood and closing down almost 2 per cent.

Sellers abounded in most stocks, although the Iseq’s largest component stock, building materials group CRH, was snapped up in the early part of the session as it was announced overnight that it had made the cut on the Dow Jones Euro Stoxx 50 index – a development which meant index-tracking fund managers had to buy the stock.

The cement company’s shares reached a daily high of €18.81, before slipping all the way to €17.50, but most of the trading action was at the €18.00 level. The stock was weaker at the close of yesterday’s markets, finishing down 2.2 per cent at €17.50.

Ryanair’s journey went in the opposite direction, with its stock under pressure for most of the day, but rallying at the close. Nevertheless, it finished negative, down 1.3 per cent at €3.08.

Irish Life Permanent was the “star performer” across Europe, according to one Dublin-based dealer, with the stock finishing up 7.3 per cent at €5.10.

However, there was volatility in the two banks affected by the proposed National Asset Management Agency (Nama) – AIB and Bank of Ireland. Both stocks were very weak, with AIB falling almost 10 per cent to €2.41, while Bank of Ireland slipped 4.6 per cent to €2.38.

Traders expect more swings in the share prices of both banks in the run up to the debate on the Nama legislation on September 16th, as investors speculate on the extent of the discount applied to the property and land loans transferred to the agency.

Elsewhere, stocks such as DCC, Smurfit Kappa, Independent News Media and Fyffes also finished down, but there were gains for Grafton, Kerry and Elan.