DUBLIN REPORT: Iseq:2,955.78 (+28.59) Settlement date:December 24th

THE FINANCIAL sector had a volatile day yesterday due to investor jitters over the future of Irish banks.

On Sunday, Central Bank governor Patrick Honohan said in a televised interview that one or both of Ireland’s big banks could end up in majority Government ownership for a time.

This spooked investors who shied away from AIB and Bank of Ireland, with the latter tumbling by 10 per cent at one point. However, positive sentiment in markets across Europe filtered through to the Iseq by lunchtime and provided some relief for the banks.

Bank of Irelandrebounded during afternoon trade and, by the close, had managed to add more than 3 per cent – close to four cent – to finish at almost €1.22.

However, AIBdipped below €1 and, although it regained some ground by the finish, it was still down more than 4.5 per cent on the day at just under €1.04.

Irish Life & Permanentalso came under pressure, closing down about 1 per cent – or three cent – at €3.04.

Elsewhere, Ryanaircontinued its upwards march as more buyers bought in yesterday. The no-frills airline closed more than 3 per cent (about 11 cent) up at just under €3.39.

Cider manufacturer C&Cpulled back a little following a very high close last Friday.

It finished at €2.82, a drop of almost eight cent.

Building materials giant CRHwas more than 3 per cent stronger on the day. Positive sentiment in international markets helped lift it to €19, although it settled back to €18.93. Overall, volumes remained thin on the Irish market yesterday.

Despite the volatility in the banking sector, the Irish market traded up in line with European markets, gaining more than 1 per cent.