Dublin report: The Iseq index of Irish shares ended the first day of the week down 31.56 points, after a 7 per cent decline in Eircom shares helped drag the index down.

Eircom's decline, which saw the stock end the day at €1.73, 14 cent lower than Friday's close, was prompted by the company's announcement that it had agreed to buy Meteor, Ireland's third mobile phone company, in a deal worth €420 million.

Dealers said the fall could be attributed to the company's decision to fund the acquisition with a rights issue, meaning shareholders will have to buy more shares or risk diluting their stake.

The second busiest stock after Eircom was Allied Irish, which led the financials lower, dropping 12 cent, to end the day at €18.08. Bank of Ireland followed suit, closing down 8 cent, at €13.75.

Meanwhile Anglo Irish was unchanged at €11.30, and Irish Life & Permanent bucked the trend of its rival banks and added 5 cent, to end the day at €14.85.

Another loser on the day was CRH, which after ending last week at a record high, slipped 3 cent, to close at €23.11. Dealers said a decline from this level was because of profit-taking.

Elsewhere, IAWS dropped 10 cent, to €11.20, while Ryanair lost 17 cent, to end the day at €6.62.

Kenmare Resources ended the day unchanged at 43 cent, even after news that construction of the group's Moma titanium plant in Mozambique is ahead of schedule.

Elan gained 5 cent to close at €6.50. The pharmaceutical company is due to release its results for the second quarter on Thursday.

Grafton also ended the day up 5 cent, at €9.08, while FBD added 20 cent to close at €29.70.

Jurys rose 20 cent, to end the day at €15.80, after reports of higher-than-expected bids for one of its hotel sites at Ballsbridge. Investors are also waiting to see if Precinct will make an improved bid for the group by Friday's deadline.