Speculation that the recent gains were nothing more than a "bear rally" proved well-founded yesterday with losses on most stock market as investors who had bought into the rally took their profits. Dealers believe that pattern is likely to be the same for the months ahead, with rallies being followed by profit-taking, and that it may be well into the second half before any recovery becomes sustained.
Apart from Smurfit, where once again more than three million shares traded, there was little volume in yesterday's profit-taking. Smurfit itself was unchanged on €1.99 but, among the large-capitalisation stocks, AIB lost 21 cents to €11.09, Bank of Ireland was 10 cents lower on €9.30 while CRH drifted seven cents to €17.58. Eircom was seven lower on €2.47, while DCC was unchanged on €10.65 as Davy put a €16.75 price target on the shares.
In the mid-cap part of the market, comments at the a.g.m. that foot-and-mouth disease may hit current trading saw Irish Continental drop 53 cents to €5.57, with the likelihood that analysts will cut back existing 2001 forecasts.
On overseas markets, Baltimore was 21/2p lower on 931/2p. The stock has been hit by a "sell" recommendation from Merrion. Merrion has also come out with a highly negative report on the stock and this will only add to the pall of gloom overhanging the shares.
The heavy early losses on Nasdaq hit all the Irish technology shares with Iona down 10 per cent in early trading while SmartForce was trading 11 per cent lower. Hibernia Foods was down almost 15 per cent in early trading in a delayed reaction to its poor third-quarter results.
