ISEQ down as bank shares tumble
Published 21/05/2010 | 05:00
IRISH shares endured another bruising session yesterday as unco-ordinated attempts by policymakers to resolve Europe's debt crisis unnerved investors.
The ISEQ Overall index fell 96.82 points, or 3.3pc, to 2882.12, its lowest level since February 26 as the banks tumbled and other large companies such as CRH and Kingspan also declined.
Bank of Ireland slid 14pc to 76c as investors sold the right to take part in the rights issue. The bank's decline took place during heavy trading which saw 43 million shares trade hands.
Rival Allied Irish saw its shares fall 8.7pc to €1.04 as doubts about the bank's chances of selling assets in the US and Poland resurfaced.
Irish Life & Permanent closed down 4pc at €2.18 after mortgage volumes fell 37pc in the first quarter and moodyseconomy.com said house prices may fall a further 18pc before hitting the bottom. Construction stocks were also lower, with CRH falling a further 3pc to €17.60 in the wake of Wednesday's downgrade at JP Morgan, while Kingspan closed down 5.2pc at €6.55.
Kenmare was among the few winners, adding 4.6pc to close at 12c after telling shareholders that production at its Moma mine continued to improve in April. Production of ilmenite, the mine's main product, was up 14pc last month. Production of zircon was up 20pc.
It was much the same story elsewhere as national benchmark indexes dropped in all 18 western European markets, except Iceland. "Investors are unwinding their positions today even though there isn't a lot of news or macro drivers in the market," said Neil Phillips, a fund manager at BlueBay Asset Management in London.
The Stoxx Europe 600 Index slid 2.2pc to its lowest close since May 7. The gauge fell a combined 5.2pc on Wednesday and yesterday, with Germany's unilateral ban on some bets against government bonds and financial institutions triggering a flight from equities.
"The shocking thing is not really what they have done but how they have done it and that is what has really spooked the market," said Gary Jenkins, head of credit strategy at Evolution Securities in London. "It looks as if at the top of the European Union there is a complete division about how to deal with this crisis and at a time of stress you need unity."
British Airways declined 3.2pc after a court ruled the airline's 12,000 cabin crew are free to resume strike action over pay and staffing levels.
Porsche, the maker of the 911 sports car that's combining with Volkswagen, led a measure of car makers to the second-biggest drop in the Stoxx 600. Porsche shares slumped 5.3pc as Deutsche Bank rated the manufacturer "sell" in reinstated coverage.
Brewer SABMiller slid 6pc after it reported a 1.7pc drop in full-year operating profit to $3.1bn.