One of the worst days in three years on ISEQ as big hitters take a tumble
The ISEQ entered a bear market yesterday as shares tumbled in tandem with every other stock market in western Europe following Standard & Poor's downgrade of the US's credit rating.
The ISEQ Overall index slid 110.75 points, or 4.4pc, to 2,395.73 points. The benckmark has now plunged 21pc since May. A fall of more than 20pc over several months is usually defined as a bear market although there is no official definition.
"It really was a total rout. We were almost looking at capitulation," said one trader after one of the worst days on the exchange since March 2008.
Heavyweights, which have held up until now, such as Ryanair, drinks company C&C, Glanbia, DCC, Elan, Kerry and Independent News & Media all posted declines of at least 4pc.
Oil companies also suffered a terrible day, with oil giant Tullow posting a 7pc decline. Petroceltic suffered a 21pc plunge, while Petroneft and Dragon also posted declines.
Oil itself fell to its lowest price in more than eight months as investors fled commodities for assets such as US Treasury bills and gold.
European stocks dropped to their lowest level since August 2009 as the downgrade of US debt overshadowed the European Central Bank's purchase of Spanish and Italian government bonds.
France's CAC dropped 4.7pc, Germany's DAX Index declined 5pc and the UK's FTSE 100 Index slid 3.4pc. Spain's IBEX 35 Index and Italy's FTSE MIB Index lost 2.4pc. Both gauges had jumped more than 4pc earlier in the day.
The benchmark Stoxx Europe 600 Index dropped 4.1pc by the 4:30pm close in London, for its biggest retreat since March 2009.
"Macro is clearly dominating at the moment -- it's going to feel like we are dipping in and out of a recession for the immediate future," said David Hussey, head of European equities at Manulife Asset Management.
BHP Billiton, the world's largest mining company, plunged 5.1pc as commodities extended their biggest weekly drop in three months amid concern that the economic slowdown may erode demand. Anglo American lost 6.2pc and Rio Tinto sank 6.5pc.
PSA Peugeot Citroen, which was downgraded by Morgan Stanley to "underweight", led carmakers lower, tumbling 9.1pc. Daimler sank 7.1pc and Volkswagen retreated 6.1pc.
French bank Societe Generale sank 8.4pc in Paris. The nation's second biggest bank and UniCredit denied a report that the lenders may require a bailout.