Despite slipping almost 2 per cent, the Irish market proved relatively resilient today as the recent rally in international markets came to an abrupt halt, and stock indexes tumbled around the globe.
Investors were spooked by news that the White House had rejected rescue plans from General Motors and Chrysler, making the bankruptcy of one or both beleaguered automakers more likely. The Obama administration also warned that some banks will need more government aid, which further unnerved investors.
As usual the performance of the overall Iseq index of Irish shares was a function of its two biggest components, CRH and Ryanair. Although these stocks fell by 2.3 per cent and 1.4 per cent respectively, one broker noted that they "didn't get hit has badly as they might have" considering the global sell-off, and this resulted in the "slight outperformance" of the overall Irish market, he said.
The Irish banks had a "very, very negative" day yesterday, the broker observed, spiralling downwards in line with European financial stocks. AIB shed almost 9 cent to close at €0.55, while Bank of Ireland traded down by over 4 cent to €0.45. Irish Life & Permanent didn't escape the gloomy sentiment either, and lost 12 cent to close at €1.00.
A small number of stocks managed to buck the downward trend however.
In the food sector, Kerry Group gained 20 cent to close at €4.40, while Aryzta traded up by 18 cent to €17.13. Elsewhere industrial holdings group DCC gained 19 cent - almost 2 per cent - to finish the session at €11.49.
National benchmark indexes slipped in all of the 18 western European markets. Germany's DAX lost 5.1 per cent, the most in almost four months, and France's CAC 40 slid 4.3 per cent. The UK's FTSE 100 dropped 3.5 per cent.
Banco Santander, Spain's biggest lender, fell 7.5 per cent to €4.94 as Spain mounted its first major bank rescue in 16 years, taking over Caja Castilla-La Mancha after efforts to choreograph its purchase by a rival lender failed.