DUBLIN REPORT:A VOLATILE day saw the Irish market climb as much as 6 per cent yesterday, before it dropped back in the afternoon to close up by 80.4 points, or 2.7 per cent, at 3,022.9, writes Fiona Reddan

Having opened strongly following a rally in US markets the previous evening, most stocks on the Irish market had a bit of a bounce yesterday, but both AIB and Anglo Irish Bank were hit once more.

The issue which continues to hurt the banks is whether they need to be recapitalised. Although the banks have said they do not need to be, and the Financial Regulator reiterated this view yesterday, the market refuses to believe it and AIB continues to bear the brunt of this belief.

Having closed down almost 19 per cent the previous day, AIB lost 24 cent, or 7.0 per cent, to close down at € 3.20 yesterday. Anglo Irish Bank also performed poorly, dropping 17 cent, or 7.4 per cent, to finish the day at € 2.12.

Irish Life Permanent, which was up as much as 24 per cent at one stage, finished the day up by 60 cent, or 16.4 per cent, at € 4.25.

Bank of Ireland also performed strongly, closing up 16 cent, or 7.2 per cent, at € 2.31.

The Budget also hit the market as stocks directly impacted by it fell in late trading. Paddy Power, which was hit with a 2 per cent betting tax, shed 30 cent, or 2.5 per cent, to close down at € 11.70.

Aer Lingus, which had stayed steady during the day, suffered from the introduction of a € 10 travel tax in the Budget, and fell off in late afternoon, giving up 6 cent, or 4.4 per cent, to close down at € 1.21. However, its competitor Ryanair actually finished the day up, adding 8 cent, or 3.6 per cent, to close at € 2.21.

Drinks group CC was not hit by a price rise in cider in the Budget, but nevertheless it was off by 6 cent, or 3.8 per cent, on the day, closing down at € 1.41.