Iseq down €7bn for week as markets falter

A further fall in the Irish Stock Exchange yesterday left investors with losses of more than €7 billion for the week.

Most international markets went the same way. But there were some signs of a recovery - London held its own and New York stocks rebounded as Europe closed for the weekend.

Investors in Irish shares saw a total of €7.1 billion wiped off the value of their holdings in the Dublin market between last night's close and the end of trade a week earlier.

The total value of all shares traded on the market fell to €124.9 billion last night from €132 billion at close of business on Friday, June 1st. This is a loss of close to 5.5 per cent.

Among the big losers will be the pension funds into which over half the Republic's two million workers are investing for their retirement.

Pension funds typically place a high proportion, but not all, of their cash in shares. These investments are generally structured to reflect the performance of market indices, which are used to measure the overall performance of an individual market or group of shares.

The Iseq index of Irish shares dropped 49.25 points to close at 9381.82 last night. However, dealers said that as business wound down yesterday afternoon, many leading stocks began to recover some of their losses, indicating that there was some possibility of a recovery.

Positive news from New York sent some investors back into the Irish market. By about 6pm last night, the Dow Jones industrial average - one of the benchmarks for US shares - was up 24.54 points, or 0.18 per cent, at 13,291.27.

Another key index, the Standard & Poor's 500, was up 2.91 points, or 0.20 per cent, at 1,493.63. The Nasdaq Composite Index - largely made up of technology and biotech companies - was up 12.11 points, or 0.48 per cent, at 2,553.49.

A positive monthly sales report from McDonalds Corporation, owner of the global fast food franchise, and results from hi-tech player National Semiconductor, helped boost US shares.

This trend began to be felt in London, as the FTSE index closed unchanged at 6,505.1, partly helped by a strong performance in oil stocks.

European stocks continued to fall, but at a slower rate than earlier in the week.

The pan-European FTSEurofirst 300 index closed down 0.09 per cent, at 1,567.64. The index finished the week down 3.6 per cent.

In Frankfurt the DAX index ended at 7,590.5 points, down 28.11 or 0.37 per cent, losing 397.35 points in the week. In Paris, the CAC-40 index closed at 5,883.29 points, down 7.2 or 0.12 per cent, dropping 284.86 points over the week.

Investors began to desert stocks this week after the European Central Bank (ECB) raised its interest rates this week and its US counterpart signalled that it would not be cutting its rates.