The Irish stock market reversed a 11-day winning streak yesterday, losing 0.88 per cent as a sell-off in Asian stocks markets and a wobbly start on Wall Street hit investor confidence across Europe.

Bearish sentiment prevailed in the Asia-Pacific region as most stock markets closed lower yesterday, led by a 4.1 per cent decline in Hong Kong shares.

Dealers said factors affecting investor sentiment included a drop on Wall Street on Tuesday, a plunge in the gold price and a sharp decline in the value of the South Korean won.

The Dow opened weaker after losing 61 points on Tuesday as worries about technology stocks hit the market while the FTSE closed down 46 points.

Despite the bullish performance of recent days, Ireland was not immune to the international weakness. The ISEQ index of Irish shares, which has been climbing steadily into record territory since last Wednesday's budget, slipped back 35.65 points to close at 4,028.05.

"There was some concern about how Wall Street would open and that cast a pall over European markets," one equity dealer said.

"Given the huge run that Dublin has had recently, we were particularly susceptible to some profit-taking."

Most of the leaders shed one to two per cent with the financial shares particularly prone to profit-taking, dealers said. AIB slipped 15p to 680p while Bank of Ireland lost 10p to 1040p. Elsewhere in the financial sector, Irish Life dropped 4p to 388p and Irish Permanent was down 5p to 730p.

In the industrial sector, CRH was down 12p at 828p, Smurfit lost 4p to 199p while Kerry dipped 10p to 770p. But traders said investors were using the general weakness to buy into some of the second-line stocks with direct exposure to the Irish economy.

Recruitment company Marlborough International added a further 10p to Tuesday's 15p gain and closed at 170p, Heiton gained 8p to 202p, Grafton was up 25p at 1325p and DCC rose 10p to 440p.

Dunloe's share price was unchanged at 21p after the property group offered £25 million for Belfast group Ewart, which did not trade from a previous close of 75p.

Tullow Oil, which announced that all three zones in its Suri gas well in Pakistan had tested at commercial rates, lost 0.5p to 156.5p.