ISEQ tumbles by more than 5pc on back of massive CRH decline
Published 25/08/2010 | 05:00
The Dublin market tumbled by more than 5pc yesterday, mainly driven by a massive fall in CRH.
The buildings materials group, which is the largest company on the ISEQ, tumbled by 16.6pc, as the market reacted badly to its interim results released yesterday.
Analysts in Dublin said the interim results took the market by surprise, particularly in light of the trading update in July, and investment bank Citi cut its rating to hold.
Worries about the share price centred around concerns over the slow pace of recovery of the US market, which represents about half of CRH's activities.
The results from CRH, which is one of the largest makers and distributors of building materials in the world, also impacted on European markets, dragging down the construction sector.
The sector was not helped either by data from the US, which showed a record drop in existing home sales in July.
Overall, European stock markets fell to a one-month low.
The FTSE hit a one-month low, ending the session down 78.89 points, or 1.5pc. The UK banks, closely geared to the overall health of the economy, were big fallers, with Royal Bank of Scotland the worst off, down 3.5pc.
Britain faces the risk of sliding back into recession and the central bank's growth forecast for this year and next may be too optimistic, new Bank of England policymaker Martin Weale said yesterday.
Despite final figures confirming that the German economy grew by 2.2pc in the second quarter from the previous three-month period, the German DAX fell 1.3pc and French CAC dropped 1.7pc.
The composite Stoxx 600 index fell 1.7pc while and the Dow Jones Industrial Average had dropped more than 1pc
In Dublin, construction-related stocks were hit. Kingspan tumbled by 6pc of 33c to finish at €5.04, contrasting with the 6pc gain sustained on Monday on the back of its interim results. Grafton lost 13c of 5pc to €2.50.
Despite results for the first half of the year, which showed that pre-tax losses had contracted by 80pc, Aer Lingus lost 4.3pc.
The share price finished the day at €0.89. Bank of Ireland fell 3.98pc to 75c and Allied Irish Banks slipped 3.27pc to 80c.
Few stocks ended the day in positive territory on the ISEQ, though food stocks managed to hold their own. Kerry Group added just under 1pc to close at €24.75 while Glanbia, which posts interim results today, finished the day flat at €3.38.