IN the first day's trading under the new Crest settlement system, Irish shares fell by over 1 per cent in line with European markets and Britain. Volumes were also very low with many investors on holidays.
Traders said the weakness on Wall Street following profit warnings last week from Motorola and Hewlitt Packard contributed to the fall.
General Motors, Philip Morris and Intel are all due to report this week. "If any of those shows any sign of weakness all markets will get the jitters," one trader said.
The fall in the FTSE 100 also fed through to keep many Irish investors on the sidelines. The British Energy placing opened up at a discount, losing thousands of investors' money and putting the skids under the British market.
Among individual stocks, hotels were hard hit. Anything to do with tourism is going to be marked down after the escalation of violence up North, one trader said. "The bomb at the weekend has frightened a lot of investors."
Banks had another bad day, following bond markets lower. AIB lost 5p to 313p while Bank of Ireland remained flat at 415p. Irish Permanent also lost, ending the day 2p lower at 390p.
Other industrials lost more heavily. CRH lost 10p to 592p while Smurfit lost 35/8p to 164p.
Second liners had a mixed day.
DCC lost 2p to 265p while Heiton remained flat at 101p and Independent lost 6p to 290p Bonds also fell, following the US lower. Traders said all eyes are on the US for any signs of an imminent rate hike.
Consumer price data, due out today, will also be closely watched.
Bond markets, particularly at the short end, were also suffering after the Dutch increased interest rates slightly on Friday adding to concerns that the next move in Irish interest rates may be up. German money supply data later this week will be important in determining whether the German Bundesbank is likely to cut its reporate, traders said.
The 10 year benchmark closed at 102.42p to yield 7.5 per cent from 7.46 per cent while the 6.5 per cent five year bond fell to 97.53p yielding 6.96 per cent from 6.94 per cent.
