Share prices in City hit six-year lows

SHARE prices in London hit six-year lows yesterday, while shares in Paris and Amsterdam fell to five-year lows, as more than 1 billion was wiped off the value of shares on the Irish Stock Exchange.

Stock markets continued their downward spiral following losses of billions of euro last week.

The sharp falls provided buying opportunities for Irish companies like Independent News and Media, IWP and Galen to buy back shares in their own companies when the prices are weak.

The ISEQ index of Irish shares fell by 2.4%, knocking 1,149 million off the value of companies quoted on the Irish Stock Exchange.

Ulster Bank financial markets economist Niall Dunne said uncertainty was only set to heighten again this week.

"So yet again, the market will be driven by US developments this week. Over the weekend, the global geopolitical situation worsened when Iraq warned that it would reject any new UN Security Council resolutions yes, they will admit weapons inspectors but no, they won't comply with any other orders.

Add to this heightened tensions in the Mideast, as Israel lays siege to Palestinian President Yasser Arafat following further suicide bombings, and you can understand why oil spiked to 19-month highs of $30.50 in Asia," he added.

In London, British blue-chips fell to their worst closing level in six years, hit by losses in banks Barclays and Royal Bank of Scotland amid fears about the outlook for bad debt and corporate profits.

Gloom about the outlook for financial markets took its toll on other financials, with fund manager Amvescap, the biggest blue-chip faller, with a near 10% loss to 302 pence.

The FTSE benchmark index sank 120.7 points or 3.1% to 3,739.4 points, below the 3,777-point six-year closing low of July 24, but still three percent above that day's intraday low of 3,626 points.

Wider market sentiment was also hit by a sharp fall on Wall Street, where investors were reeling from a fresh batch of disappointing earnings reports, this time from telecoms equipment maker JDS Uniphase and retailing giant Wal-Mart.

In Amsterdam, share prices closed sharply lower in line with international markets, with the AEX index closing below the 300-points level for the first time in more than five years, dealers said.

The AEX index closed down 13.30 points or 4.3% at 294.72 after touching an intraday low of 291.99 at 4.50pm and reaching an early high of 313.64.

In Paris, share prices closed sharply down at levels not seen since November 25, 1997, pulled down by discouraging news in the technology sector in Europe and in the US and a larger than expected decline in US

economic data, dealers said.

The CAC-40 index finished down 96.51 points or 3.34% at 2,794.31 on a volume of 3 billion. Among CAC-40 stocks, two closed higher and 37 closed lower and one closed unchanged. On the Matif, September CAC-40 futures were 109.5 points down at 2,785.5.