Market report:As much as €3.5 billion was wiped off the value of the Irish market yesterday despite dealers saying there was nothing fundamentally wrong with the Irish story.

However, the knock-on effect of British bank Northern Rock issuing a profit warning and seeking funds from the Bank of England to cover a shortfall, meant that banks around the world were out of favour, and Ireland was no exception.

Anglo Irish was the worst hit, falling more than 8 per cent, at one stage before recovering some ground to end the day down 6.7 per cent, or 90 cent, at €12.60. As many as nine million shares changed hands.

One dealer said investors were particularly wary of Anglo Irish as it is very exposed to the commercial property sector, though another said the fact that it wasn't involved in the housing market should actually work in its favour.

It wasn't the only one to be hit however, with anything that was vaguely financial or construction-related falling significantly. Combined, these stocks account for about 70 per cent of the Irish market, a fact that helps to explain the Irish market's underperformance when compared to its European peers.

Bank of Ireland initially lost as much as 6.4 per cent, before recovering to end down 2.3 per cent, or 29 cent, at €12. As many as 7.8 million units traded.

AIB meanwhile closed 2.3 per cent, or 40 cent lower, at €17.40, after earlier falling as low as €16.85.

CRH, the largest stock on the Irish market, was also a big loser, dropping 5.5 per cent, or €1.60, to €27.64. It too closed off its earlier lows, having been down more than 6 per cent at one point.

Irish Life & Permanent lost 5.1 per cent, or 84 cent, to close at €15.53.