Dublin report: Drinks group C&C stole the limelight yesterday on a day that was expected to be dominated by interest rates decisions from both the European Central Bank and the Bank of England.
While the ECB left rates on hold at 3.5 per cent, the BOE surprised the market with a quarter per cent rise to 5.25 per cent.
However, hours before these announcements were due, the Irish market was already heading downwards, dragged lower by a slump in shares of C&C, a company that has been the star of the market in recent times.
The reason behind the decline was a note by Merrion Stockbrokers saying it was cutting its rating on the stock from buy to hold and lowering its earnings per share forecasts for 2007 and 2008 by 2.5 per cent and 8.7 per cent respectively. It also removed the stock from its 10-stock model portfolio.
The shares had their biggest ever one-day decline, dropping €1.43 to close at €11.87 with almost 14 million units changing hands in Dublin alone.
Elsewhere the market spent the afternoon recovering some of the earlier losses and ended the day more or less flat, though well behind its European peers.
Dealers said the use of the word "monitor" rather than "vigilant" by ECB president Jean-Claude Trichet allayed concerns of an imminent rate increase.
Demand for Anglo Irish Bank was high, with more than 5.7 million shares changing hands. The stock closed up 18 cent, at €15.79.
AIB ended up 10 cent, at €22.25, while Bank of Ireland closed flat, at €17.12.
Grafton and McInerney suffered as a result of the interest rate rise in the UK and the likely implications for the housing market. Grafton fell 25 cent, or 2 per cent, to close at €12.25, while McInerney was down 29 cent, or 1.9 per cent, at €15.01.
