Tough day for financials as rates held

The best course of action was inaction, both the European Central Bank (ECB) and the Bank of England felt yesterday, as the two central banks left their interest rates on hold.

However, while the ECB had been expected to leave things be, the market was disappointed by the Bank of England's failure to cut rates, so yesterday's trading session was another tough one for the financial stocks.

With its exposure to the UK, Bank of Ireland, having escaped the worst of the losses on Wednesday, took the news the hardest yesterday, with its 51 cent fall representing a drop more than 5 per cent, compared to an overall dip in the Iseq index of about 0.9 per cent.

By contrast, AIB fell just half a per cent, with Anglo down 1.2 per cent and Irish Life & Permanent shedding 4 per cent.

Technology group Horizon was the worst performer, promptly falling 17 per cent to 53 cents after it issued a profit warning.

Drinks group C&C was an underperformer, falling 4 per cent to €3.99 after investment bank UBS cut its price target for the stock in a research report.

Smurfit Kappa was another mid-cap loser yesterday, sinking almost 6 per cent to €9.97. Paddy Power fell 4.8 per cent after Citigroup downgraded the stock to a "sell" recommendation.

Oil prices fell yesterday, which left Tullow Oil down 3.4 per cent, but helped Ryanair to bounce after a bad day's trading the previous day. The airline climbed 8.3 per cent on volume of 5.7 million, recovering all of Wednesday's losses and closed at a price of €3.90. Kerry also bucked the negative tone, rising 1 per cent to €22.18.