Market reflects downward trend in the wake of US strike on Iraq

THE market drifted lower yesterday following international markets, nervous after the news of the US missile attack on Iraq.

Talk in the Wall Street Journal chat the US Federal Reserve was set to raise interest rates there by a half point also added to the jitters, graders said.

Traders said the numbers of people at the Smurfit presentation, as well as a Reuter golf outing, helped limit volume.

Most stocks dealt down and there was "precious little" bid interest around, they added.

Attention was focussed on Smurfit which remained flat at 165 1/2p.

Lower prices and overcapacity in the world's paper packaging business led to a 37 per cent drop in pre-tax profit to £126 million, in the six months to June at the group.

Profits fell in all its geographical areas. The volatility in its markets and the subsequent price fall continued in the first six months of this year. "The speed of the upturn which peaked in 1995 has been matched by a similarly fast downturn," chairman, Dr Michael Smurfit said

CRH fell back 9p to 602p ahead of its figures. "People are unsure exactly what to make of the rights issue due this morning, one grader said.

Waterford Wedgwood remained firm ahead of its figures, also due later today. It remained flat at 76p.

Bond markets also focused on the possibility of higher US rates, although Irish bonds outperformed, particularly in the 10-year area.

Traders said international players were selling other European bonds and buying Irish 10-year paper.

Attention was focused on the National Association of Purchasing Managers' index (NAPM) in the US. This came in quite strong but markets recovered nevertheless as players covered short positions.

Traders said the market would be closely watching developments in the US as well as Irish July credit figures due for release on Thursday. The Irish Exchequer Borrowing Requirement came in at £85 million - a higher figure than expected.