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Irish stocks suffer as stress tests take their toll

IRISH stocks continued to fall yesterday, rounding off a tough week for the index, as eyes again turned to Europe and the stress tests.

By the close of trading the ISEQ Overall Index had fallen 0.99pc, or 28.66 points, to 2,861.69. That was well down on the index's Monday opening of 2,940.64, but given the tumultuous week markets around the continent had endured, it could have been significantly worse.

Eight banks failed the EU's stress tests after regulators said they had a combined capital shortfall of €2.5bn, according to results released after the close of European equity markets. All lenders in Germany, France and the UK passed the tests.

Construction giant CRH fell again, losing 0.72pc to close at €13.70, but the big loser among the major stocks was Smurfit Kappa Group. The packaging giant slumped 8.75pc to €7.30 after being cut to "underperform" by Bank of America.

CRH's loss pushed down the rest of construction related stocks on the ISEQ, with Kingspan (down 2.03pc) and Readymix (down 5.88pc) both ending the day in the red.

Gainers on the day were few and far between, but Kerry Group climbed 1.91pc to €29.30 after the company said it was in talks with Cargill over the acquisition of its flavourings division. CPL Resources added 3.7pc to finish the week at €2.80.

Elsewhere, national benchmark indices dropped in 14 of the 18 western European markets. France's CAC 40 Index lost 0.7pc and the UK's FTSE 100 lost 0.1pc, while Germany's DAX gained 0.1pc. The Stoxx Europe 600 dropped 0.3pc.

BHP Billiton retreated 1.9pc after the mining company agreed to acquire Houston-based Petrohawk Energy for about $12.1bn (€8.55bn) in cash.

Temenos plunged 20pc, the biggest drop since January 2009. The banking software provider reduced its full-year outlook for licence revenue.

Logitech, the world's biggest maker of computer mice, slid 2.6pc as a gauge of technology companies was among the worst performers of the 19 industry groups in the Stoxx 600. STMicroelectronics, Europe's largest chipmaker, retreated 3.5pc.

"The release of the European banking stress tests keeps investors nervous," said Kai Fachinger, at Sustainable Asset Management in Zurich. "The market is afraid of negative surprises."

Irish Independent