THE Irish market fell back slightly yesterday in line with London and other international markets.

Traders said there was talk of a downgrade in the pharmaceutical sector in the US. Elan fell back $13/4 on Friday it was trading at $58/4 from a high of $66 earlier this year. However, no evidence for a downgrade could be unearthed, they added.

Tullow Oil also attracted serious interest with 7.7 million shares traded in London, while interest in Dublin was also heavy, traders noted. There are 184 million shares in issue. Tullow announced a one for five rights issue to raise money to fund new developments. The market took this positively and Tullow closed up 71/2p at 871/2p a share.

United Drug put on 103/4p to close at 320p after it entered a pre-wholesaling joint venture with UniChem.

Volume was also heavier than usual in Celtic Resources, trade said. It closed up 6p at 40p sterling after announcing a £3.1 million joint venture agreement with a Russian company to prospect for gold.

Banks had a mixed session. AIB closed flat at 334p while Bank of Ireland lost 2p to 433p. Irish Permanent also closed flat at 400p, having traded as low as 395p earlier in the session. Golden Vale fell back 3p to 70p while Greencore fell back 4p to 332p and Smurfit lost 1p to close at 173p.

Bonds had a better day, following European markets higher after the release of better than expected German inflation data.

The benchmark 6.4 per cent five year bond closed at 97.76p to "yield 6.91 per cent from 7 per cent on Friday. The 10 year closed at 101.65p to yield 7.61 per cent from 7.63 per cent.

Traders said the main focus will be the Group of Seven meeting in Lyon beginning on Thursday.

The Bundesbank's meeting on Thursday will also be watched for any signs of an imminent repo rate cut, they added.