Iseq closes lower as banks weigh

Financial stocks suffered another day of sell-offs as leading banks Irish Life and Permanent, AIB and Bank of Ireland all finished down at close of business.

In what market traders termed a ‘bleak day’ for the Iseq, Irish Life and Permanent finished at €4.33, down by 17.37 per cent, AIB closed at €1.45, down 13.73 per cent, while Bank of Ireland also finished down at €1.41, a drop of 12.19 per cent.

Traders speculated that aggressive selling of Irish financials could be down to international fund managers looking elsewhere to generate money; a reaction to speculation that Irish banks may not be able to opt for rights issues until the New Year.

Index staple C&C finished on a high at €2.55, up 4.08 per cent on yesterday’s close, while pharmaceuticals giant Elan finished at €3.78, falling back from a daily high of €3.86 but up 2.16 per cent overall.

Food conglomerate Glanbia made up the other main mover, finishing at €2.70, an increase of 2.66 per cent on the previous day’s close.

Ryanair also closed strongly at €2.93, up 1.24 per cent and outperforming the weak airline sector despite disappointing market reaction to Monday’s announcement that the budget airline had posted a less-than-expected 80 per cent increase in first half profits.

CRH, which accounts for about a third of the index, finished down 1.28 per cent at €16.94, despite having initially capitalised on Monday’s gains earlier in the day. CRH’s construction stable-mate Grafton also closed low at €3.20, 0.62 per cent down.

Elsewhere, Independent News and Media closed at €0.20, down 4.76 per cent on yesterday’s close following news that shareholders rebuffed proposals by its second biggest investor Denis O'Brien to remove Brian Hillery as chairman and to appoint a new senior independent director.

Dragon Oil finished the day down slightly at €4.94, following Monday’s surge on the back of Dubai based Emirates National Oil Company’s decision to acquire its remaining share capital.