SHARE prices drifted lower in quiet trading as the market remained steady against a background of slightly higher prices in London and a mixed start on Wall Street.

The banks were hardest hit as bond markets remained quiet ahead of auctions in Britain and the US later this week.

Bank of Ireland lost 3p to 440p and Allied Irish Bank lost 1p to 339p. "There was also a touch of profit-taking," one dealer said.

Irish Permanent was also hit) Earlier in the day, it announced a 20.6 per cent rise in pre-tax profits to £42.4 million in 1995. The dividend has been increased to 7p a share, which was at the top end of analysts' expectations. The share ended the day flat at 390p.

Traders said the market was expecting a lot from financials and the lack of an announcement on a share buy-back could have hit sentiment "The share has also done very well on hopes the 15.5 million unclaimed shares will remain that way. The unpaid dividends will then have to go to the profit and loss account," the trader said.

CRH continued to perform well. It put on 7p to 525p on strong demand from abroad as well as from domestic institutions, dealers said.

Waterford Wedgwood bounced 1 1/2p to 62p. Traders said it had hit a recent low of 59p and was due for a bounce. Volume was also said to be good.

The bond market had a steady day. There was good interest at the short end, traders said. "The positive vote for the Tories on the Scott report the night before lifted sentiment in Britain. We are now waiting for the auction," one trader said.

The dealer said he expected the £3 billion sterling auction of 25-year gilts to go well, "but there is no telling with something that size," he added.

The Irish 10-year bond closed at 100.75 to yield 7.73 per cent compared to 7.75 per cent on Monday. Five-year paper rose to 103.55 to yield 6.94 per cent from 7.01 per cent the day before.

The Central Bank's annual monetary statement came too late to influence trading yesterday. However, traders said it would be closely read for any hint of a change in exchange-rate policy.

The Central Bank said that if increases in money and credit remained substantially above growth in nominal GDP, there would be a need to tighten monetary policy. According to Central Bank figures, towards the end of 1995 adjusted credit was growing at a year-on-year rate of about 11 per cent. This is in line with analysts' expectations.