Nervous traders wait on results
IRISH shares fell yesterday as nervous traders awaited the results of tomorrow's results of stress tests on the banks leading to heavy selling all day.
By the close of trading the ISEQ Overall Index was down 1.02pc, or 29.7 points, to 2,876.76.
The trading day was dominated by the crash of Irish Life and Permanent, which lost half its value at one point during the day before closing down 45.27pc at 41c amid reports that the lender will finally have to take state funds following the stress test results.
"Everyone is waiting for the stress tests at the moment," said one market professional. "There were other small news items moving the market but between now and Thursday more selling is likely."
The stress tests are expected to reveal the country's banks will need further state funding with expectations the latest bailout could be worth as much as €26bn. Allied Irish Bank, which has already received more than €7bn from the state, fell 2.63pc to 19c while Bank of Ireland dropped 4.26pc to 25c.
Away from the financials, there was more selling. CRH fell 1.39pc to €16.65 as poor data from the US pushed dealers away from the company. Residential real estate prices dropped in January by the most in more than a year, raising the risk that US home sales will keep slowing. The construction giant conducts much of its business in the US.
Travel software company Datalex slumped 8pc to 23c despite posting annual results which were broadly as expected.
Few companies posted any gains of note, although recruiter CPL Resources added 3.57pc to €2.90.
Elsewhere, national benchmark indexes climbed in eight of the 18 western European markets. The UK's FTSE 100 Index gained 0.5pc and France's CAC 40 Index rose 0.3pc, while Germany's DAX Index lost 0.1pc. The Stoxx 600 benchmark gained 0.1pc.
"There are still plenty of worries, but the market seems to be taking it in stride," said Lawrence Peterman, investment director at Eden Financial. Investors seem to be "looking at potential earnings and valuations that are not particularly expensive."
S&P cut Portugal for the second time in a week to the lowest investment-grade rating of BBB- while Greece's rating fell two grades to BB-, three levels below investment grade.
Hugo Boss climbed 5.8pc after the company forecast that currency-adjusted sales will rise at least 12pc following "a successful start to 2011."
Wolseley gained 3.1pc after fiscal first-half earnings before one-off items jumped to £275m (€312m) after cutting costs and generating higher sales volumes.
Babcock International Group climbed 3.8pc as the company said trading for the full year is "consistent" with its expectations.