Demand for financial and industrial stocks failed to nudge the ISEQ index into positive territory as it receded from the brink of record highs to close 1.05 per cent weaker at 5,862.66.

A €3.47 drop to €62.39 in index heavy-weight Elan also had an impact, although traders said the fall was due to a lack of liquidity rather than any fundamental factor. The index's largest stock is subject to wide variations because it is denominated in dollars.

Eircom, whose businesses are the subject of bids from Vodafone and a consortium led by Esat founder Denis O'Brien, closed one cent weaker at €3.29. The former State monopoly is believed to be assessing supplementary information from Mr O'Brien, whose group wants to purchase its fixed line business. A trader said its value was "keeping up with events" as they stood. Rumours that another private equity group was poised to launch a counter-bid could not be confirmed last night.

Tech stocks did not do well, with Iona Technology suffering the biggest fall. It closed €8.5 weaker at €74, while Riverdeep fell five cents to close at €4.30. Horizon was 20 cents weaker at €8.50.

Trading was marked also by strong demand for Bank of Ireland stock which rose to €9.08 from €8.85 ahead of its half-year results for September. More than 1.3 million shares changed hands. AIB Group closed unchanged at €12.00 while Irish Life & Permanent finished 21 cents stronger at €11.81.

Ryanair rose five cents to close at €9.25 in the first Dublin trading since strong rises last Friday, when it revised its performance expectations upwards.

Smurfit added 13 cents to close at €2.10 on the back of positive performance reports in the US paper sector. More than 2.3 million shares changed hands.

On a good day for traditional stocks, CRH closed 18 cents stronger at €17.88.