The Dublin market slumped again today, as poor performances in the US and Asian markets, combined with ever-weakening financial stocks, saw the Iseq fall on opening.
By 4.30 pm, it had declined by 108.75 points, or 3.8 per cent, to fall back to 2,721.38.
Ryanair was one of the few positives on a day which was dominated, like every other day of late, by declining bank stocks.
With oil now trading at half its peak at $70, the airline stock advanced by 7 cent, or 3.3 per cent to €2.05, and expectations are that the stock will continue to climb, as oil reaches the airline's preferred hedging level.
The market reacted sharply to details of the Government's guarantee of the banks, which were announced Wednesday evening, with both AIB and Bank of Ireland falling off sharply in early trading. In addition to existing concerns over capitalisation and the level of bad debts at the banks, investors are now worried over the Government's influence in the banks, as well as the impact the €500 million charge will have on their earnings.
Bank of Ireland was the worst financial stock, decreasing by 17 cent, or 8.4 per cent to €1.85, while Anglo Irish Bank gave up 18 cent or 8.1 per cent to fall back to €2.07.
AIB performed marginally better, declining by 16 cent, or 5.0 per cent to close at €3.05.
The market still considers Irish Life the safest bet amongst financial stocks, and as such, its share price rose as much as 9 per cent, before finishing the day up 26 cent, or 6.7 per cent, at €4.10.
Elsewhere, it was a weak day across the board. Grafton Group was hit by a profit warning for its peer firm, UK building group Travis Perkins, which saw its share price collapse by almost a third. As a result, Grafton lost 35 cent, or 13.2 per cent, to close down at €2.30.
Kingspan was also hit by the news, and declined by 60 cent, or 10.7 per cent, to finish the day down at €5.00.
Smurfit Kappa reflected the outlook for the broader economy when it dropped 22 cent, or 10.0 per cent, to fall back to €1.98.
In the US, stocks fell back for a third day, after Citigroup Inc. said bad loans may rise to a record high and the government said manufacturing fell the most since 1974.
Citigroup declined by 8.8 per cent, while the S&P 500 declined by 40.29 points, or 4.4 percent, to 867.55 at 11:12 am in New York, below its lowest close since April 2003. The Dow Jones Industrial Average slid 356.26, or 4.2 percent, to 8,221.65, and the Nasdaq was down 54.93 points to 1,573.4.
The FTSE 100 had another dismal day in London, extending previous day losses to record its sharpest two-day fall since October 1987. It dropped 218.2 points, or by 5.4 per cent, to fall back to 3,861.39.
In Europe, the Dow Jones Stoxx 600 also experienced its biggest two-day drop since 1987, when it fell by 5.4 per cent to 205.41 today. In France, the CAC 40 declined by 6.7 per cent, while the DAX declined by 5.7 per cent.
