The overnight fall on Far Eastern stock markets was bad enough, but with Wall Street diving steeply on fears that the Fed will raise interest rates, the Irish market turned sharply weaker. The big question now is whether this will just be a hiccup in a rising market or whether the fears of a US rate increase will bring about a correction. If those fears of a rate rise do turn into reality then the current bull market will undoubtedly be at an end.

Given the sort of falls experienced in markets like Paris and Milan, the Dublin market did well to confine its losses to under 1.5 per cent. But some of the Irish high-tech stocks on NASDAQ took a pasting and Esat was down over $5 or almost 16 per cent as the Dublin market closed.

The exception to the negative tone was Smurfit which hit a new high of 260p before closing ahead 3p on the day on 253p. Speculation on the JS Corp/Stone merger reached a new intensity on the New York market with both stocks rising against the downward trend with huge volumes in Stone shares in particular.

Financials took the brunt of the negative sentiment with AIB 19p lower on 950p while Bank of Ire- land also lost 20p to £14.50. Irish Life suffered most among the financials, with a 27p fall to 670p, while Irish Permanent lost 5p to 965p.

Among the industrials, CRH continued to drift and lost another 10p to £10.20, while Greencore was unchanged on 450p, despite poor results from 14 per cent associate Imperial Holly. Barlo went against the trend with a 5p gain to 90p, while Tullow was 8p lower on 160p.

On Wall Street, where the technology-heavy NASDAQ index was down 3 per cent, Irish high-tech shares were sharply lower with Iona over $2 lower on $28 1/2 while Esat was down nearly $5 1/2 to $28 1/4