The weakness on international stock markets drove the Irish market sharply lower in Dublin yesterday, and the future direction of the market will be dictated by the overnight performance.

Even though the Bundesbank made no changes to its money market rates, keeping the repo unchanged at a fixed 3 per cent, there is a growing feeling in financial markets that the hawks in Frankfurt may be successful in forcing up German rates in a counter-inflationary move. Certainly that was the view on the Frankfurt stock market where share prices fell by more than 2 per cent.

Bank of Ireland suffered most among the interest rate-sensitive financial shares, falling 5p to 767p, while AIB was 2p lower on 568p. Irish Permanent - whose half-year results were at the lower end of forecasts - lost 10p to 650p, while Irish Life lost 3p to 335p.

Among the industrials, CRH came under pressure and lost 10p to 715p, while Smurfit was 5p lower on 220p despite a sharp improvement by JS Corp, whose share was up 31 cents to $19.69 by the time by the Dublin market closed.

Ryanair was 8p higher on 325p, boosted no doubt by a positive note from company broker, Davy. Davy believes the shares have the capacity to regain the 400p all-time high and believes its premium to other airlines reflects its stronger growth prospects.

Other brokers, notably Riada in a recent note, have been much more cautious, and suggest that the expected growth is already factored into the share price. If Ryanair is to regain the 400p high, it will probably have to do so without the support of Irish investors, who sold the share heavily when it reached those levels and are unlikely to buy back in now.

In a note to the exchange, Jurys disclosed that it had a 10.6 per cent take-up to its scrip dividend offer, an unusually low take-up.