Bank shares plummet amid crisis

It was a torrid day for equities in Ireland and abroad, with bank shares plummeting in value as the Eurozone debt crisis threatened to spread, and concern about the status and future of Ireland's banking system mounted.

Bank of Ireland dropped a colossal 23 per cent in value closing at €0.30. The sell-off in banking shares was on heavy volumes. Brokers in Dublin said the sell-off was due to concerns that the bank could be nationalised, or at the very least shareholder value could be diluted as a result of the conversion of the Government's preference shares in the bank.

Bank of Ireland's fall dominated market headlines across Europe, which also saw a steep fall in the share price of other Eurozone banks. Spain's Santander bank declined 4.6 per cent to €7.81 while Portugal's Banco Espirito Santo lost 3.4 per cent to €3.03.

The other two Irish financial stocks also saw steep falls, with AIB losing 19 per cent to finish at €0.33 and Irish Life and Permanent shedding 10 per cent to €0.75.

The picture was equally dismal in the non-financial sector, with cyclical stocks taking a hit, troubled by events further afield in Korea. Global construction company CRH lost 3.8 per cent or 57 cent to €14.23. Similarly Smurfit Kappa, which earlier this week announced it had raised €250 million on the markets to refinance existing commitments and pay off some of its debt, shed 1.5 per cent to €7.26.

Elsewhere on the Iseq, Total Produce shed 5 per cent to €0.38 after the company said it was considering purchasing its own shares, prompting expectation that such a transaction is imminent.

Few companies ended the day in the black, though Irish Continental Group rose 0.6 per cent to €15.00.