Bank shares took a battering for the third successive day, but by the close there were indications that the current wave of profit-taking may have reached its peak with Bank of Ireland in particular recovering well from an oversold position.

That profit-taking in Bank of Ireland reached its peak when a line of one million shares went through the market at £14.50, 55p below the overnight price.

Many in the market were surprised the seller had to go as low as £14.50 to find a buyer for the shares, as Bank shares rebounded from that deal to close down 35p on the day on £14.70.

AIB did not suffer anything like the same level of selling and closed down 4p on 969p. AIB has issued a further 2.46 million shares under the scrip dividend scheme to 22,000 shareholders who opted for the scrip and as a result AIB has saved £22.7 million from the cash dividend.

The scrip shares were issued at 923p each, so shareholders are already sitting on a handy paper profit.

Elsewhere, Smurfit remained firm on 250p, with speculation in the market that a merger between JS Corp and Stone may be tied up within two weeks.

NCB has estimated the potential cost savings from the merger could be worth 50p-70p on the Smurfit share price, although 10p15p of that is already priced into the shares.

Arnotts was up 5p to 625p as it emerged that Fidelity bought another 264,000 shares this week to bring its stake to 6.3 per cent. Grafton was unchanged on £19 as it revealed its agreed £35 million sterling bid for British Dredging, while Indepedent did not suffer from the departure of London Independent editor Ms Rosie Boycott, closing up 10p on 445p.

Kerry was 20p higher on £11.40 with speculation in the market that an acquisition of the Australian group Burns Philips is in the pipeline.