Shares tumble in dismal day for ISEQ

AIB and Bank of Ireland led the sharp 4.5% drop on the Irish Stock Exchange in what was a dismal day for many Irish shares.

AIB fell 14% to 88c yesterday while Bank of Ireland slumped 18% to 95c.

The ISEQ index fell by 117.06 points to 2,493.68, which was in line with other European stock markets.

Irish Life & Permanent plunged 53c or 19% to €2.20.

In the construction sector, CRH weakened 66c to €16.95, Grafton Group slumped 27c to €2.51, and Kingspan dropped 47c to €3.85.

Drinks group C&C progressed 1c to €1.95, Kerry Group fell 38c to €15.60, and Ryanair decreased 16c to close at €3.17.

It was a busy day for AIB, which has lost 49% of its value this year. It held an EGM followed by its AGM yesterday.

Shareholders voted in favour of the Government’s €3.5 billion re-capitalisation plan while the bank’s outgoing chairman, Dermot Gleeson, apologised to shareholders for “the anxiety and distress” they had suffered from the collapsing share price and the cessation of dividends.

Davy Stockbrokers reckon that AIB could be as much as 74% owned by the State by the time the €3.5bn recapitalisation and the migration of “bad” loans to NAMA are complete.

In Britain stocks suffered their biggest fall in more than three weeks after Bank of England governor Mervyn King said it will take time for the economy to recover and Land Securities Group posted a record loss.

The benchmark FTSE 100 Index lost 2.1%.

“Clearly we are not out of the woods just yet,” said Philip Gillet, a London-based sales trader at IG Index.

“Many are asking if this is really the start of a bull market or just the sound of a bear rallying. We could see investors clicking the sell button and consolidating over the next few days.”

Frankfurt’s DAX fell 2.6% to 4,728 and in Paris the CAC lost 2.4% to 3,153.

Earlier, Japanese shares closed higher as investor sentiment remained upbeat despite some weak company results. The Nikkei added 42 points to 9,340. The Hang Seng fell 94 points to 17,060.

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