Shares drop on news from Greece
Published 02/11/2011 | 05:00
LIKE the rest of Europe, Irish shares plummeted yesterday after the decision by the Greek government to put the new bailout agreed last week to a referendum.
By the close of trading, the ISEQ Overall Index had plunged 4.27pc, or 116.47 points, to 2,608.19.
It was a brutal session, which saw the index dive from the opening and never get close to positive territory for the rest of the day.
The sell-off saw the ISEQ fall as low as 2,603 before something of a rally.
The announcement late on Monday that Greek Prime Minister George Papandreou would put the terms of the EU bailout agreed at Brussels summit last week to a referendum caused near panic throughout the continent, with traders dumping any stock that was even vaguely exposed to Greece. Banks in particular were battered.
Irish Life & Permanent fell 12pc while Bank of Ireland tumbled 9.6pc. Allied Irish Banks lost 8pc.
The sell-off was not confined to the financials, however, on a day when only two stocks booked a gain.
CRH slid 7.8pc for its biggest percentage loss since it posted a profit warning in March.
Global manufacturing fell last month, new data showed, hitting the construction giant.
Nearly every quoted company lost territory yesterday. Greencore continued to fall back only days after announcing it was in talks to be taken over, closing 4.11pc lower at 70c.
Glanbia fell 2.97pc to €4.58. Kerry Group dropped 3.04pc to €26.16, while Kingspan dropped 7.75pc to €5.95.
It was the same story around Europe, as stocks sank the most in five weeks.
National benchmark indices tumbled at least 2pc in all 16 western European markets that were open, except Iceland.
France's CAC 40 Index dropped 5.4pc, Germany's DAX Index lost 5pc and Italy's FTSE MIB Index plunged 6.8pc. Greece's ASE Index sank 6.9pc.
The Stoxx Europe 600 slid 3.5pc for its biggest loss in more than a month.
"After the euphoria from last week's eurozone summit, this is a dose of cold water and introduces further uncertainty into the market," said Edmund Shing, chief European strategist at Barclays in London.
"It just shows you how important details have become. It's not as bad as the market makes out and is more of a knee-jerk reaction. We don't yet know when the referendum will take place," he added.
A gauge of European banks sank 6.2pc, its largest decline since August 18, even as the Institute of International Finance reaffirmed the lenders' commitment to the 50pc writedown on Greek debt that the IIF agreed to last week.
Societe Generale crashed 16.2pc, while BNP fell 13.06 on a day which saw financial stocks dumped across the continent.