An estimated €1.4 billion was knocked off the value of the Irish stock exchange yesterday as it succumbed to the general weakness in overseas markets, with the financials bearing the brunt of the fall. The ISEQ finished more than 2 per cent down on the day at 4,973.84, a fall of 120.71.

On what one analyst described as a "pretty horrible day" for financials, the Republic's two largest financial stocks fell to two-year lows. Bank of Ireland finished down 40 cents at €7.20 while AIB fared little better, finishing down 46 cents at €10.04. Irish Life & Permanent also suffered, falling 40 cents to €9.55.

Some analysts attributed the decline to continuing fears over interest rate rises and weakness in British bank stocks. The switch to other stocks, including those in the technology sector, was also identified as a factor fuelling the financial fall.

Banking shares led the whole market down, with the decline compounded by profit-taking on several stocks. After its recent surges, CRH slipped by 93 cents on the day to finish at €20.95. Likewise Independent News & Media lost some ground on its recent advances to finish down 17 1/4 cents at €8.2275. Fyffes was down nine cents to finish at €2.63. Eircom was one of the few stocks to weather the storm yesterday - probably reflecting rumours of a possible US interest in the stock, according to one analyst. After heavy trading, the stock finished up 3 1/2 cents at €4.28 1/2.

Other movers on the day were DCC, down 12 cents to €7.80; Ryanair, down 15 cents at €11.35 and Smurfit, down 5 cents at €3.21 1/2. Greencore fell 10 cents to finish at €2.85 and Kerry finshed down four cents at €11.95.