Iseq tumbles 4.1% as bank stocks go into free fall

Iseq: 4,659.51 (-199.27).THE ISEQ index of Irish shares tumbled more than 4 per cent yesterday as financial stocks went into free fall.

After what could be best described as a bloodbath, the Dublin market closed down 4.1 per cent at 4,659.51, making it by far the worst-performing market in Europe.

Weakness in US banking stocks from Monday night's trading hit Irish banks from the outset. But Bank of Ireland's interim management statement ahead of its annual general meeting was the real catalyst for the sell-off in banking stocks.

The bank said slowing economic growth in its main markets, together with global market dislocation, continued to adversely affect economic earnings and said it could not provide a guidance figure on profits for the year.

A wave of selling in banks ensued and Bank of Ireland saw its price hammered, with almost 11 per cent knocked off the value of its shares as it shed 55 cent to close at €4.51.

It was even worse for Irish Life Permanent, with the stock trading down 20 per cent at one stage. It eventually closed 13.25 per cent weaker, losing 71 cent to €4.65. AIB fared little better, losing almost 10 per cent of the value of its share price to close at €8.10. Anglo Irish Bank, meanwhile, was 7 per cent weaker at €5.089.

Airlines were one of the few positive features during the session as oil retreated by $5, falling below the $140-a-barrel mark.

Ryanair was the star performer of the day, with its share price surging more than 11 per cent to €2.83.

Aer Lingus was 2.29 per cent stronger at €1.325.

However, the drop in oil prices had a knock-on effect on Dragon Oil, which was one of the biggest fallers on the Iseq yesterday. It lost 16 per cent to close at €5.122.

Settlement date: July 11th