Once again the biggest news of the day emanated from the banking sector, with AIB announcing that it aims to improve its capital base by raising €1.5 billion through the disposal of assets.
The stock skyrocketed in early trade on the back of this news. One broker noted that investors appeared to take the view that if AIB succeeds in "getting capital in the front door" by means of asset disposals, it is less likely that the Government will take a majority shareholding. Avoiding this scenario would be "better for the bank and better for the equity shareholders," he explained.
After a strong start, the stock came off after lunch - in line with the overall market which took a hammering in the afternoon session - but nevertheless closed up 2.33 per cent at €0.88.
The Iseq index of overall shares slipped almost 3 per cent to 2,377.65. CRH, the index's largest component, was the biggest drag on the market, tumbling over 6 per cent to €16.54. This fall was due to downward momentum across the wider market, rather than any stock-specific news.
Budget airline Ryanair, which has the second largest weighting on the Iseq, also closed down on the day, falling more than 6 cent to €3.19.
Meanwhile Independent News & Media proved to be one of the strongest performers of the day, closing up more than 18 per cent at €0.225. This move may have been prompted by media reports over the weekend that the group is considering selling off two of its titles, which would help to reduce its debt load. However brokers cautioned against reading too much into the jump, given that the stock is currently trading at such low levels.
European shares closed sharply lower, with banks taking most points off the index as investors gave the thumbs down to Bank of America results marked by an increase in troubled loans. The FTSEurofirst 300 index of top European shares closed 3.5 per cent lower at 786.12 points, the biggest daily percentage drop since March 30th.
In London, the FTSE 100 index closed 101.94 points lower at 3,990.86 - its biggest percentage fall since March 30.
In Frankfurt, the DAX index ended at 4,486.3 points, down 190.54 or 4.07 per cent, while in Paris the CAC-40 index closed at 2,969.4 points, down 122.56 or 3.96 per cent.
In the US, at 6.21pm the Dow Jones industrial average was off 219.04 points, or 2.69 per cent, at 7,912.29, and the Standard & Poor's 500 Index was down 28.93 points, or 3.33 per cent, at 840.67.