The rally in Irish stocks came to a halt in late afternoon trading today as international events overshadowed the market.
After a positive start in which the Iseq was up nearly 4 per cent at one stage, the gains were wiped out as many markets turned negative on reports from the US that plans by Korean Development Bank to take a stake in investment bank Lehman Brothers while, despite a fall in oil prices, weak economic data and sentiment added to the gloom.
Earlier in the day European Economic and Monetary Affairs Commissioner Joaquin Almunia told a conference in Frankfurt that the European Commission’s interim economic forecasts due tomorrow would show growth prospects for the second half of this year were not very good and that European Union needs to take urgent action to avoid a prolonged economic downturn and return to stronger growth.
By the close of business, the Iseq had slipped into the red, losing 10.2 points – or just 0.2 per cent – to 4,558.85.
Banks and construction firms were again among the most heavily stocks.
Financials gave up most of the gains made earlier in the day, with Bank of Ireland being the only one to remain in positive territory as it closed the day 3 cent better off at €5.90. AIB finished 5 cent weaker at €8.75, while Irish Life & Permanent she d12 cent – or 1.65 per cent – at €7.16. Anglo Irish Bank saw 10 cent knocked off the value of its share price.
A number of construction stocks were also under pressure. Grafton was down nearly 4 per cent as it shed 14.5 cent to €3.555, while CRH fell back by around 1 per cent, or 19 cent to €18.70. Kingspan, however, closed the day strongly, picking up 10 cent to €8.30.
Falling oil prices boosted airline stocks and Ryanair was no exception. Its share price surged by 6 per cent as it tacked on 16 cent to €2.80. However, Dragon Oil plunged by more than 13 per cent, or 43 cent, to €3 on falling oil prices.
European stocks fell, led by mining and energy companies, as investors speculated the economic slowdown will hurt demand for metals and oil dropped to a five- month low.
Anglo American sank 8.2 per cent and Rio Tinto Group dropped 6.7 per cent as copper, lead and nickel prices retreated in London. BP led energy producers lower.
National benchmark indexes dropped in 14 of the 18 western European markets. France’s CAC 40 slid 1 per cent and Germany’s DAX also declined 0.7 per cent. The UK’s FTSE 100 retreated 0.7 per cent.