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Trading subdued as banks' losses cause shares to fall

IRISH shares fell, led lower by banks and other financial stocks. Elsewhere in Europe, markets also declined following bad news from the US.

In Dublin, trading was subdued with many shares closing unchanged. Most of the losses were seen in bank shares with Bank of Ireland falling 2.4pc to 16.4 cent and Allied Irish closing down 1.4pc at 7c.

The biggest declines were seen at Permanent TSB which closed down 10.3pc at 3.5 cent. Insurer FBD closed down 1,3pc at €12.50.

The various declines pulled down the ISEQ financial index by 2.2pc. That was more than twice the decline seen on the benchmark ISEQ Overall lndex which ended the day down 35.52 points, or 0.9pc, at 3879.82 points.

The poor performance of the Irish financial sector was in strong contrast to the rest of Europe where most banks posted gains.

National Bank of Greece rallied 24pc while Barclays closed up 6.9pc. Man Group, the world's largest publicly traded hedge-fund manager, surged the most in four years as regulators cut the amount of capital it must hold.

The Stoxx Europe 600 Index rose 1.8pc this week, despite dropping 0.9pc yesterday as US retail sales and consumer confidence missed forecasts. The gauge had fallen for three straight weeks, the longest stretch of losses in more than 10 months.

Optimism

The benchmark measure has gained 4.5pc this year as American lawmakers agreed on a compromise budget and data on housing and jobs fuelled optimism the world's biggest economy is recovering.

"The week was pretty mixed data-wise, but China saved the world," said Christian Zogg of LLB Asset Management in Vaduz, Liechtenstein.

"The poor figures out of Europe and the US at the end of last week suggested that the central banks can run a loose monetary policy for a much longer time. Financial shares got a pretty strong boost from that. Sentiment isn't exactly euphoric, but stocks offer the best yield on the capital market."

National benchmark indexes rose in all of the 18 western European markets this week, except Iceland.

The UK's FTSE 100 added 2.2pc, while France's CAC 40 increased 1.8pc and Germany's DAX gained 1.1pc. Greece's ASE Index surged 13pc for the biggest jump in nine months.

Irish Independent