Irish shares lost ground yesterday as a sharp drop in Elan and weakness in CRH weighed on the market. The ISEQ index closed 1.3 per cent lower, failing to benefit from a strong close in London and a good early start on Wall Street.

The sharp drop in Elan, a major constituent of the index, was one of the reasons for the poor performance in Dublin. Elan shares closed 10 per cent lower at #26.47 (£20.85) after the pharmaceuticals group warned that four cents would be knocked off next year's earnings because of a delay in launching a migraine drug to which it has the US rights.

In New York, the share was trading more than 16 per cent lower by the close of trade in Dublin, despite the release of good third quarter results which showed a 37 per cent rise in net income.

CRH shares also lost ground, shedding 61 cents to #18.10 (£14.25) amid concerns that the company might consider a bid for British group Tarmac which would involve a fund raising.

Shares in Tarmac jumped by £252 million sterling (#393 million) in value after the group announced it had received a potential takeover approach. However, most analysts were sceptical that CRH was the bidder, noting that it was in consolidation mode after spending #1.3 billion on acquisitions to date this year.

Elsewhere, dealers said trading was quiet and volumes were not heavy. AIB closed 11 cents higher at #11.99 (£9.44) while Bank of Ireland was up three cents at #7.60 (£5.99). Dealers said they expected further buying of the banks ahead of Bank of Ireland half-year figures which are due for release on November 11th.

However, Irish Life & Permanent failed to benefit from the more positive sentiment toward the banks, finishing 30 cents down at #9.40 (£7.40).