Banks and construction firms take a further hammering

THE banks and construction sector took a further hammering yesterday as the global construction downturn undermined confidence in building companies and banking shares.

In Dublin the financial sector was hardest hit, dragging the ISEQ down 1.81%, as persistent fears about global economic growth and the protracted credit crunch raised serious doubts about future earnings.

However, it was the construction sector in the guise of McInerney Properties which suffered the sharpest share price fall on the day.

At yesterday’s close the house builder, exposed to both the British and Irish markets, saw over 14% wiped off its share price as it tumbled to 73 cents.

A the height of the market last year the group was trading at €3.26.

McInerney’s woes is a further reminder that the two markets are in serious turmoil, as housing output is cut drastically from previous levels.

Global builders provider, CRH, also fell despite its broad geographic spread and its track record of serious growth over the past decade or more.

Its share price fell a more modest 2.9% to €20.42.

European stocks retreated for a sixth day, the longest losing streak since 2005, on speculation that rising inflation will force central banks to increase interest rates, worsening the banking sector as the economy slows further.

National indexes decreased in all 18 western European markets.