Shares fall for seventh day as Japanese crisis worsens
Slip linked to Central Bank stress tests which are to be based on 60pc drop in home prices from 2007 peak
IRISH shares fell again yesterday -- the seventh day in succession -- as the situation in Japan appeared to worsen, while the Central Bank released details of the stress tests it is applying to the major banks.
On the day, the ISEQ Overall Index closed down 1.22pc, or 33.71 points, at 2,713.00. It was a difficult day for the index, with an afternoon sell off ensuring it would end with a loss.
The crisis in Japan appeared to be worsening while the Central Bank revealed the stress tests it was applying to the banks were based on an up to 60pc drop in home prices from the 2007 peak.
The Japanese question forced a sell off in most major stocks, amid fears for the world economy.
CRH was one of the big losers, dropping 1.49pc to €14.50. The construction giant was not helped by data from the US which showed that home construction there dropped 23pc last month to its lowest level in a year.
With CRH slipping, it was no surprise that Grafton Group lost ground as well, slumping 3.88pc to €3.22.
The banks had a mixed day. Irish Life & Permanent tumbled 8.96pc to 61c after the company said its purchase of deposits and government-guaranteed bonds from Irish Nationwide Building Society last month may have a "marginally negative" impact on earnings and capital.
The lender was apparently not helped by the conditions of the Central Bank's stress tests which are predicated on houses losing up to 60pc of their value from 2007. IL&P is the biggest mortgage lender in the country.
Bank of Ireland joined in the losses, falling 3.65pc to 29c but Allied Irish Banks added 2.43pc to close at 21c.
Ryanair was one of the few companies away from finance that could trace their loss directly to something other than bearish sentiment among traders. The low-cost carrier slid 2.97pc to €3.13. The Slovak government approved a plan to lease Bratislava airport, the country's busiest, to a strategic partner for 30 years.
The government expects the partner to boost traffic and reduce the airport's dependency on Ryanair, which has the biggest share.
Despite all the selling, there was some buying. Providence Resources jumped 5.77pc to €3.30 as oil prices rose again amid turmoil in Bahrain while Glanbia added 2.59pc on the back of a positive report from Davy Stockbrokers.
Elsewhere, national benchmark indices fell in 12 of the 18 western European markets. The UK's FTSE 100 slid 0.8pc, while France's CAC 40 and Germany's DAX lost 1.1pc. The Stoxx Europe 600 index lost 0.6pc.
"It's too early to call the bottom," said Markus Steinbeis, of Pioneer Investments.