An air of fear hung over the Irish market yesterday as the Iseq tumbled 3.2 per cent to close on 5,806.84.
Traders blamed a weak dollar and high oil prices. The financial stocks were the worst affected with the Iseq Financial off 3.96 per cent at 8,023.73.
Traders said there were large sellers of Anglo Irish Bank and Bank of Ireland active during the session driving them down 4.6 per cent to €7.50 and 6.6 per cent to €7.00, respectively. Allied Irish Banks held up strongest, down just 2.4 per cent to €12.04.
This followed a note from Citi that was extremely bearish on the Irish financials. Citi downgraded them all but suggested that Bank of Ireland and Anglo Irish Bank were the most exposed to bad loans. As one trader put it, the banks “were back at 1998 levels”.
With spiking oil prices driving sentiment Ryanair also suffered – it dropped over 6.5 per cent to €3.01. There was an exodus from construction stocks as well with CRH off over 4 per cent to €22.32 and Kingspan closing at €6.12 down 3.7 per cent.
In London the FTSE 100 was down 88.50 to 5906.8, Germany’s Dax was off 138.02 to 6803.8 and France’s Cac 40 closed down 111.74 to 4795.3.
The US markets continued their downward spiral on the back of recessionary fears fuelled by new data that showed US unemployment rose at its fastest rate in over 20 years.