Elan pulls Iseq down despite rising banks

Unusually, the main Irish banks are rising this afternoon on a falling Dublin market as a 26 per cent fall in Elan shares dragged the Iseq down.

At 12.34pm the Iseq index of 62 shares was down 1.5 per cent at 4,516.

This figure only tells half the story, according to analysts, as financial stocks received two pieces of positive news.

AIB's half-year figures were generally viewed as reasonable by brokers with particular attention being played to the 10 per cent increase in dividend. The news sent AIB shares up over 4 per cent to €7.66 and boosted other banking stocks.

Bank of Ireland shares were 5.4 per cent higher at €5.51 while Anglo Irish Bank shares were up 6.8 per cent higher at €5.61.

Shortly after midday Irish Life and Permanent announced it has received the final tranche of term funding required to replace the €3 billion of funds maturing in the current quarter.

Brokers said this news would remove much of the uncertainty surrounding the stock and at 12.34pm it was 16.4 per cent higher at €5.37.

The performance by the Irish banks is all the more impressive given than UK banking stocks were lower this afternoon after Lloyds TSB announced a 70 per cent in profits.

Despite positive news from the financials Elan shares lost over €5.50 of their value or 27 per cent after detailed clinical trial results for its new Alzheimer drug proved mixed. The share was trading at €15.00 at lunch time.

Construction giant CRH has seen its shares gain 6.8 per cent to €17.05 after Lehman Brothers upgraded the stock.

Ryanair shares, which have endured a torrid couple of days were over 3 per cent higher this afternoon at €2.68.