Market Report'Decimated' was the word used by one dealer to describe activity in the Irish market yesterday as €2.6 billion was wiped off the value of the Iseq index of Irish shares. Ryanair was the main loser, dropping as much as 8 per cent at one point.

Traders could find little reason for the disappointing performance, which saw the Iseq substantially underperform its European peers.

One said that the figures looked like every company on the index had come out with a profit warning and not just Ryanair. The Iseq closed at 9,715.99.

As well as revealing a 33 per cent increase in net profits for the year to the end of March, the low-cost airline yesterday forecast profit growth of only 5 per cent this year, citing falling average fares and weaker demand. The outlook, dealers said, was the focus of investors.

The shares closed 7 per cent, or 38 cent lower, at €5.04, with more than 14 million units changing hands. Elsewhere, the financials all put in a poor showing, with AIB dropping 3.3 per cent, or 75 cent, to end the day at €21.79, while Bank of Ireland fell 2.3 per cent, or 36 cent, to €15.60. Irish Life & Permanent fared even worse, dipping 4 per cent, or 83 cent, to €19.82.

Dealers said some of the declines, such as the 4.4 per cent drop in Independent News & Media, could be explained by a spate of profit-taking following the recent strong performance, but others, such as the 3.6 per cent drop in C&C, were harder to explain.

Ryanair's malaise seemed to infect Aer Lingus, which closed down 3.5 per cent, or 10 cent, at €2.80.

Newcomer Origin Enterprises was one of the few gainers, adding 75 cent, to close at €3.75 on its first day of trading on the IEX.