Slight fall in ISE as Irish market outperforms Europe

The Irish market out-performed its European peers today, falling by just 1.4 per cent, compared to an average fall of about 5 per cent in the major European markets. The Iseq closed down 33.05 points at 2,417.14.

Speculation that the Government is close to finalising a joint private equity/Government investment in the banks saw financial stocks rally hard, albeit on weak volumes. Overall, financials closed up by 5.8 per cent.

Anglo Irish Bank performed strongly throughout the day, climbing above the 1 level in early morning trading, and advancing by 32 per cent by lunch-time. However, the stock fell back late in the day to close up by 9 cent, or 10.6 per cent, at 0.92.

Bank of Ireland held its gains throughout the day to close up by 12 cent, or 12.8 per cent, at 1.05, while AIB also finished the day in positive territory, adding 6 cent, or 2.8 per cent to close at 2.24.

Irish Life & Permanent, which is seen to be sufficiently capitalised and not in need of a Government bail-out, fell back in the afternoon to close down by 7 cent, or 4.3 per cent, at 1.44.

CRH suffered on the back of poor US housing statistics, to drop back by 53 cent, or 3.2 per cent, at 16.23, while Smurfit Kappa also declined, giving up 10 cent, or 5.3 per cent, to finish the day down at €1.75.

In its interim management statement published today, building firm the Grafton Group revealed that market conditions have deteriorated in both Ireland and the UK in the second half of the current financial year. However this was in line with expectations and the stock fell back only slightly, closing down by 4 cent or 1.7 per cent, at €2.28.

Following its losses today, insurance firm FBD regained some ground in early morning trading, climbing by almost 6 per cent. However, it finished the day steady at €8.50.

After suffering a torrid time in the US the previous evening, Elan followed its US ADR downwards, losing 38 cent, or 7.6 per cent, to close down at €4.65.

In New York, declining stocks sent the S&P 500 below its lowest close since 2003, and the index is now on course for its worst year since 1931. Banks led the decline, including JP Morgan Chase and Citigroup, which gave up 6.1 per cent following its announcement that it would buy $17.4 billion of assets from structured investment vehicles it advises.

By 11.11 am, the S&P 500 had fallen back by 1.8 per cent to 843.76, while the Dow Jones Industrial Average lost 90.08 points, or 1.1 per cent.

In Europe, the Dow Jones Stoxx 600 Index fell to its lowest level since May 2003, due to ongoing fears over recession and deflation as well as a poor corporate earnings outlook. It fell by 4 per cent to fall back to 193.87.

In the UK, Lloyds TSB shareholders backed the proposed takeover of ailing rival HBOS, and the FTSE 100 lost 5 per cent. In Germany, the DAX slid by 4.9 per cent, while in France, the CAC 40 gave up 4.1 per cent.