European stocks retreat for third day

Stocks across Europe retreated for a third consecutive day today after US president Barack Obama said he would limit risk-taking by banks and speculation grew that China will increase measures to slow economic growth.

Dealers in Dublin said Irish companies were continuing to benefit from a positive international response to the December budget, which is differentiating Ireland from other European countries with deficit problems in the eyes of investors. But Irish banks were not immune to the downward trend in banking stocks today, with AIB slipping 1.8 per cent to €1.40 and Bank of Ireland down 1.2 per cent at €1.43.

On a day that was quiet overall, Elan rose 3.6 per cent to €5.64 as the European Medicines Agency (EMEA) reiterated that the benefits of Elan's Tysabri drug continue to outweigh the risks.

There was a decent amount of activity in Smurfit Kappa, which fell 4.4 per cent to €6.12, despite upward pressure on containerboard prices.

Iseq heavyweight CRH closed down 5 cent at €17.76, however the stock has performed better than its peers in the building materials sector, according to dealers, because of its relative lack of exposure to cooling emerging markets.

Dragon Oil gained 2 per cent to finish at €5.01 as it published an upbeat new operational update, indicating positive trends on production volumes.

Drinks group C&C was flat at €2.76 as it was confirmed that the Office of Fair Trading is to examine its purchase of cider company Gaymers. However, dealers said this was to be expected as a matter of course and that given the size of rival Scottish & Newcastle's share in the cider market, the deal should be given a seal of approval.

Meanwhile, industrial holdings group DCC slipped 2 per cent, as one of its peers in the UK environmental business sector, Augean, issued a profit warning.

On a day when flag carriers were weak, Ryanair closed up 2 cent at €3.42, which dealers said was testament to the low-cost model.