Top banking stocks under pressure as index loses 1.5%

MARKET REPORT: The stock market lost 1.5 per cent yesterday, dragged lower by a weak performance from the two main banking stocks.

"The leading banks came under pressure because they have passed on the rate cut, which will impact on their margins, and ahead of the AIB trading statement," one trader said.

AIB, which has been downgraded to "equal-weight" from "overweight" by Morgan Stanley - which has also cut its share price target on the stock to 13.80 - lost 52 cents, or 4 per cent, to 12.48. The losses came despite a buy recommendation from another broker, UBS, and some speculation that the bank might be included in the FTSE Eurotop 100 index when the quarterly review takes place on Thursday.

Bank of Ireland also gave up ground, losing 31 cents, or 2.8 per cent, to 10.75. But Anglo Irish Bank outperformed its rivals, closing down just three cents on the day at €7.65.

Ryanair shares finished 13 cents lower at 5.97, as chief executive Mr Michael O'Leary and non-executive director Mr Declan Ryan sold four million shares each at 5.95. Davy and Morgan Stanley successfully placed the eight million shares in the airline with European institutional investors.

CRH was another loser, shedding 12 cents to €13.38, as figures from Euroconstruct pointed to weak growth in many of the European markets to which it is exposed.

Waterford Wedgwood shares were broadly unchanged at €0.20 as more than 5.6 million shares changed hands, while there was also heavy trading in McInerney with 3.5 million shares traded although the stock closed unchanged at 3.00.