Dublin down as US plunges

IRISH shares finished the week in negative territory yesterday, closing down almost 4% yesterday as bank shares again plunged.

Irish Life and Permanent fell more than 17% to €1.04 while AIB lost 7% to 60 cent and Bank of Ireland fell 2c to 34c on a day the ISEQ ended down 94 points at 2,077.

Elsewhere, CRH dropped almost 7% to €15.22 and Elan lost 8% to €5.13.

Ryanair shed 6c to €3.08; Aer Lingus dropped 5c to 89c while C&C fell 7c to 93c.

Other European stock markets also plunged amid fresh fears about the health of US banks.

In London, the FTSE closed down 3.2%, with mining group Anglo American falling 17% to £10.27 after reporting a fall in 2008 profits.

Frankfurt’s DAX fell 4.8% while the Paris CAC closed down 4.25%, its lowest level since April 2003.

“We have had a tsunami of bad news that is knocking us over,” said David Buik, a London-based markets analyst at BGC Partners.

“The outlook is not particularly good,” he said.

In the US, Citigroup and Bank of America shares plunged amid market rumours that the US government would nationalise them.

“The economic situation could not be at a worse moment and the risk is that this goes on for some time,” said Cesar Martinez, a fund manager at Gesmadrid in Madrid.

“As investors we prefer to wait and see which direction markets will take before putting bullish or defensive bets.”

“It was a very disillusioning week, especially the uncertainty over exposure to eastern Europe,” said Peter Braendle, who manages $50 billion at Swisscanto Asset Management in Zurich. “We are on very low levels and there are still a lot of uncertainties surrounding the financial industry.”

US housing starts slid to an annual rate of 466,000 in January, according to figures from the Commerce Department.

A report from the Federal Reserve showed industrial output decreased 1.8% in January. Both figures were worse than the average economist forecast in a Bloomberg survey.