Oil worries and bank stocks drag market lower

Market Report: The Irish stock market fell by more than 1 per cent yesterday as international markets continued to fret about near record oil prices.

Settlement Day: May 25th

A poor showing from the financial stocks also contributed to the 65-point fall in the ISEQ index.

Dealers said Bank of Ireland, which lost 10 cents to €9.87, was hovering just above 52-week lows.

"It's a bit unloved at the moment," one dealer said. "Although it's trading at 7.9 times earnings and yielding 4.5 times, investors are wondering where the catalyst is."

AIB, which admitted to charging mortgage clients for insurance they did not request, also weakened, closing 23 cents or nearly 2 per cent lower at €11.70.

Irish Life & Permanent, which holds its annual meeting today, also lost 15 cents to €12.40.

Of the main banks, only Anglo Irish managed to make headway, adding a modest five cents to €12.73.

Elsewhere, Elan gave up all of the gains logged in Dublin on Wednesday, closing 97 cents or nearly 5 per cent lower at €18.47. In New York, however, it had nudged up by two cents to $21.85 by the close.

Goodbody said yesterday that it was raising its price target on the stock to $27.50 from $23.50 on foot of expected positive newsflow for the stock in the months ahead.

Leading industrials also had a weak day with CRH giving up 17 cents, or nearly 1 per cent, to €17.33 while Ryanair was off by eight cents, or 1.7 per cent, to €4.55.

Kerry Group, which said it was buying a Danish dairy ingredients firm, added 15 cents to €16.55.

Grafton, which confirmed it had acquired a further 5.3 per cent stake in Heiton, lost 20 cents or 3 per cent to €5.80. Heiton was unchanged at €5.

The market's most recent entrants edged higher with Eircom adding one cent to €1.41 and C&C also closing a cent stronger on €2.32.