Bank stocks hit hard as Iseq falls 5pc

Shares in Irish banks have fallen between 10 and 18per cent today dragging the Dublin market more than 5 per cent lower and knocking over €2 billion off the value of Irish shares.

At 12.11am, the Dublin market was 5 per cent lower at 4,615, a fall of 243 points.

Analysts in Dublin said the banking stock sell-off  was due in part to a lack of guidance offered by Bank of Ireland in its interim management statement published this morning.

Concerns emanating from the US last night that two of the country's biggest mortgage providers may have to raise even more money to strengthen their balance sheets, sent European banking stocks lower this morning.

However, even these concerns account for only part of the fall and analysts admitted this afternoon they were at something of a loss to explain the dumping of Irish bank stocks.

Leading the way down was Irish Life and Permanent which plunged 18 per cent to €4.40 today. Its shares have lost 50 per cent of their value since it issued a guidance on June 17th.

Irish Life and Permanent shares shed 9.9 per cent of their value yesterday after Moody’s lowered it outlook for the bank.

Having fallen by as much as 12.5 per cent this morning Bank of Ireland (BoI) shares reached midday at €4.54, a fall of over 10 per cent. Shares in the bank have fallen over 55 per cent this year and are down from €15.50 on July 10th last year.

Analysts noted that the interim management statement from the Bank revealed that the business environment has changed significantly since it published full-year results in May.

Anglo Irish Bank shares were also hit hard this morning, dropping over 10.7 per cent to €4.88, with AIB stock shedding over 10 per cent to €8.04.

Dublin brokers said Irish banking shares were being hit harder than their European counterparts, most of which were 4 to 5 per cent lower this morning.

“There appears to be an ongoing fear about the Irish banks and the fact that they were among the most aggressive lenders into UK property. There are fears about too much exposure to property,” said one.

Market heavyweight CRH was also lower this morning, slipping over 5.8 per cent to €15.32 on the back of weak sector sentiment and trading statement from Persimmon which reported a 31 per cent fall in completions over the first half of the year.

Only three Irish stocks were in positive territory today; Ryanair, Thirdforce and Prime Active Capital.

Other European markets were also lower this morning with the FTSE 100 index recovering somewhat to reach noon 1.6 per cent lower, the Paris-based Cac 40 index also traded around 1.8 per cent lower as did Germany's Dax index.