Banks slip as guarantee feelgood factor wears thin

Iseq: 3,552.90 (-390.76) Settlement date: October 9th:THE IRISH exchange was the victim of another severe sell-off yesterday, as markets around the world tumbled, trading in financial stocks was suspended in Iceland and Europe experienced its worst decline since the crash of October 1987.

As has become the norm, financial stocks led the slide, as Irish banks gave up the gains earned from the Government's guarantee last week, and banks around the world fell on the back of continuing concern for the stability of the sector. Irish Life Permanent was the worst performer on the day, as it dropped €1.50, or 23.1 per cent, to close down at €5.00. Anglo Irish Bank wasn't far behind, as it declined by €1.10, or 21.7 per cent, to close at €3.99, while Bank of Ireland lost €0.85, or 17.5 per cent, to close at €4.00.

Allied Irish Banks was the best performing of the Irish bank stocks yesterday, although it still gave up €1.10, or 14.7 per cent, to fall back to €6.40.

Greencore was hit hard by the sale of Icelandic financial firm Exista's 10.9 per cent share in the Irish food group. Heavy trading volumes of over 20 million saw the stock decline by €0.38 or 21.1 per cent, to €1.42.

Despite oil falling as low as $88.9 a barrel at one stage, Ryanair still performed poorly, dropping €0.19, or 8.2 per cent, to close at €2.01.

Merrion's downgrade of Elan saw the pharmaceutical firm lose €1.18, or 14.7 per cent, to fall back to €6.80, while construction stocks were also hit.

Grafton Group fell back by €0.32 or 9.8 per cent to €2.96,

Kingspan gave up €0.50 or 7.6 per cent to close at €6.10 and CRH lost €0.47 or 3 per cent to finish the day at €15.41.

Food group Aryzta was one of the few stocks to increase yesterday, as it grew its share price by €0.55, or 2 per cent, to close at €28.55.