MARKET REPORT:THE DUBLIN MARKET struggled for direction yesterday, reflecting the general trend across Europe.

The decision by the European Central Bank to hold interest rates steady was expected but, in the light of the Bank of England decision to sanction a further half point cut in UK rates, it did little for equities here.

Financial stocks were also hit early in the day by a note from Davy stockbrokers which said all the listed banks, with the exception of Irish Life Permanent, were likely to report losses this year and next.

That exacerbated markets already waiting nervously for details of the impending recapitalisation of AIB and Bank of Ireland.

By the close the Iseq was off just over eight points or 0.35 per cent, though the financials were 2.6 per cent weaker.

Having failed to capitalise on the advance by the banks on Wednesday, AIB was again the weakest performer yesterday, shedding 6.4 cent, or 5.5 per cent, to end the session at €1.086.

Bank of Ireland also lost ground, albeit in very light volume, to finish on 62 cent, off three cent or 4.6 per cent.

Irish Life Permanent, however, was among the best performers.

Buoyed by the Davy report, it added 12 cent, or 7.5 per cent, to close on €1.72.

Among the industrials, Smurfit Kappa saw decent volume but dipped slightly to €1.68, down four cent, while index heavyweight CRH was 15 cent lighter on €18.35.

The listed airlines had contrasting fortunes, with Ryanair jumping 12 cent, or 3.66 per cent, in reasonable volumes to close on €3.395, while Aer Lingus was among the laggards, ending seven cent, or 7.3 per cent, off on 88.5 cent.

Settlement date: February 10th