DUBLIN REPORT: Iseq:2,976.59 (+9.17) Settlement date:February 25th

BANK OF Ireland tumbled 6 per cent on the Dublin market yesterday as investors reacted to Friday’s revelation that the Government has taken a further 16 per cent stake in the bank in lieu of a €250 million dividend.

However, traders noted that the market reaction was not as catastrophic as some had been predicting. “People had been expecting a really bad trading pattern,” one trader said. “It wasn’t that bad.”

Although the stock touched a low of €1.12 on the day, by the close it had recovered a little and finished down about eight cent at €1.18, on average volume.

AIBfell "in sympathy" with Bank of Ireland, traders said, and was off nearly 3 per cent, or three cent, just below €1.09.

Irish Life & Permanentbucked the negative trend and continued to attract buyers yesterday, adding 4 per cent to finish at €3.15. This was attributed to press speculation that British group Resolution may be considering a bid for the group.

Outside the banking sector, the Iseq index was supported by a solid performance from its largest component CRH. The cement giant bounced more than 1 per cent, or 24 cent, to €17.65. There was also a little bit of activity in Ryanairon the day, with the low-fares airline climbing slowly but surely back up towards the €3.50 mark. The stock added 1.5 cent yesterday, bringing it to €3.46.

Kerry Groupadvanced 1.6 per cent, or 36 cent, to €22.75 ahead of results due out today.

Elsewhere, DCC put in a strong performance, adding almost 40 cent to €20. Grafton Groupremained under pressure, slipping another two cent to just under €2.43.

Overall the Iseq index was slightly up at 2,976.59, with the result that it outperformed its major European peers, which were all down on the day.