Nasdaq recovery fails to lift Eircom shares

Shares on the Dublin exchange declined by 0.17 per cent yesterday with Eircom reaching a new low, Irish Continental declining further after poor results last week and traders anticipating interim results later this week from AIB.

An early recovery on the Nasdaq after Friday's slump failed to bouy Eircom, which dipped 5 cents to €2.55 reflecting weakness among fixed-line telecom stocks. In particular, British group Thus reported slower revenue growth than anticipated and said tough competition for residential Internet customer would wipe out its cashflow this year.

Irish Continental, which issued an effective profit warning on Friday, lost more than 10 per cent, dropping 75 cents to close at €7.00. A trader said retail investors were selling the stock though there was little evidence that institutional investors were offloading it.

The trader said few observers expected AIB would reveal the extent of its DIRT liability when it reports results for the first half of the year tomorrow. Shares in the bank, which is expected to report an 11 per cent increase in first-half profits to more than €585 million, declined by 2 cents to close at €8.80.

Other financial stocks - whose general value rose by 0.3 per cent - were mixed. Of the leaders, Bank of Ireland added 11 cents to €6.63 and Irish Life & Permanent was 5 cents weaker at €7.70 by the close. Mortage lender First Active, which rose marginally after the appointment of a new chief executive late last week, fell back again yesterday, closing 7 cents down at €1.78.

Of the front-line industrials, Viridian rose 18 cents to €11.02 and CRH lost 25 cents to finish at €18.25. Elan, the index's largest stock, was 70 cents higher at €55.30.