The first part of the week saw the market resurgent, with decent gains made by most of the leaders. But it proved to be a false dawn and the last two days have seen the market fall back again because of ominous signals from Russia and Asia. Heavy falls were recorded in late trading yesterday.
While it took some time before Mr Yeltsin decided to devalue, it has failed to stabilise the Russian markets. One man who played his part in depressing the markets further was the first deputy chairman at the Russian central bank, Mr Sergei Aleksashenko.
His comment that the current Russian crisis might lead to the failure of some of the country's banks was hardly re-assuring to companies who are heavily exposed to the Russian market.
In Dublin, this international uncertainty continues to weigh down the market, despite a brave attempt by leaders like AIB to move upward. Even though the ISEQ rose 65 points to 4929 on Wednesday, most of this gain was confined to the leaders, with many second line stocks now moribund for several weeks.
"In the present atmosphere nobody is willing to take a risk with a second line stock, instead people are looking for safe havens, either dependable leaders or even bonds," said a dealer during the week.
The debate is whether the current international problems are part of a long-term trend or simply a short-term correction. The emergence of Latin America as another economically troubled region has added support to the view that it is a long-term problem. However, the head of equity research at Davys, Mr Robbie Kelleher rejects this view and says the current problems are part of a correction.
"I think the wider economic environment of low interest rates and strong growth is what matters in the end of the day," he says. He adds that Irish stocks are "extremely good value with considerable upside" in comparison to other markets.
However, he rejects the view that larger stocks will be able to insulate themselves from the current storms. "Look at some of the big names, Waterford Wedgwood and Smurfit, they are all suffering," he says. However, he adds that larger stocks are likely to be the first ones to recover from the present slide.
CRH is an example of a stock which started to recover this week, only to be knocked back on Thursday by 8p to 895p. Yesterday it had slipped back another 10p to 885p.
"There are certain stocks which are bearing the brunt of the current depression and CRH seems to be one of the biggest victims," said a dealer.
Many exploration companies, like Dragon and Tullow, are being hit by the general fall in world oil prices, while paper, packaging companies like Smurfit are feeling the pinch as international trends worsen.
Next week sees results from Irish Permanent which may give the market something to cheer about. But international concerns will continue to dominate and a very nervous opening looks in prospect.
