IRISH shares fell back yesterday, ending three days of gains, after a record loss from Anglo Irish Bank suggested the bailout for the banks may need to be strengthened.
On the day, the ISEQ Overall Index lost 0.53pc, or 15.98 points, to close at 2,995.83. It was an inauspicious day for the index, which slipped into negative territory early and stayed there for the rest of the day after Anglo said it would post a €17.6bn loss for 2010.
Anglo chairman Alan Dukes said it was likely that saving the nation's banks could cost up to €15m more than previously forecast.
"A clean banking core will require something in the region of €50bn," said Mr Dukes. "A clean banking restructuring implies the acceptance of irrecoverable losses."
That news hit the banks still quoted, with Bank of Ireland losing 3.47pc to finish on 39c and Irish Life and Permanent falling 1.6pc to close on 97c. Allied Irish Banks bucked the trend however, and ended the day with a small gain despite spending most of the day in the red. AIB rose 0.3pc to 28c.
The banks were not the only laggards on the day, however. Food stocks fell across the board as commodities continued to surge. Wheat hit a 30-month high after the UN warned a drought in China could cut world supplies.
Kerry Group fell 0.87pc to €25.18 while Glanbia fell 1.9pc to €4.13. Greencore shed 2.83pc to close at €1.20.
There were few winners on the day but Elan investors had reason to cheer after the pharmaceuticals company posted its first operating profit for the full year since 2001. By the close the share price was up 1.94pc at €5.16.
In contrast, stocks rose across the rest of Europe as better-than-estimated results from ArcelorMittal to Swedbank and Swatch outweighed China's third increase in interest rates in four months.
National benchmark indexes gained in 12 of the 18 western European markets. Germany's DAX Index advanced 0.5pc and the UK's FTSE 100 rose 0.7pc, while France's CAC climbed 0.4pc. The Stoxx Europe 600 was almost unchanged.
"Earnings are very positive," said Philipp Musil, at Semper Constantia Privatbank in Vienna. "Investors have more and more confidence. The private investor is seeking yield and he only finds it in risky assets."
ArcelorMittal rallied 2.8pc after the steelmaker reported fourth-quarter earnings before interest, tax, depreciation and amortisation of $1.85bn (€1.35bn).
Swedbank climbed 5.2pc after the banks annual profits beat estimates. Swatch increased 5.8pc after the watchmaker said profit increased 42pc in 2010 as it sold more Breguet and Omega watches in Asia.