The Dublin market was down more than 1.3 per cent as a lack of corporate news and a bout of profit-taking dragged prices down. In London, a sharp fall in telecommunications shares drove the FTSE 100 back 1.7 per cent and this added to the flat performance in Dublin.

There was a significant amount of profit-taking in the two main banking stocks - AIB and Bank of Ireland - and this weighed down most of the market, according to dealers.

AIB was down 20 cents at €15 (£11.81) in comparatively modest trade. Bank of Ireland fell by 35 cents to €18.20 (£14.33).

"As normal when there is profit-taking in the banks, the rest of the market falls back and, as there was no other big news, that is what happened today," said a dealer. A small fall in Elan shares, from €75.67 (£59.59) to €75.38 (£59.37) completed the picture.

The drop in the big two financial stocks contributed to falls for Irish Life, down to €8.70 (£6.85p) from €8.88 (£6.99), and Irish Permanent, down 10 cents to €14.35 (£11.30).

Glanbia, the re-named food group, announced a 25 per cent increase in pre-tax profits to €95.7 million (£75.3 million). Dealers said that, while operating profits were slightly ahead of forecasts, there remained uncertainty about some parts of the company's business, including the meat division.

The shares went down 12 cents to €2.28 euro (£1.80), although dealers said the full reaction to the results would be seen today after dealers and analysts received a full briefing.

Shares in Ardagh were suspended in the afternoon after it announced a £283 million takeover of the British glass company Rockware. Before trading was suspended, the shares had risen by five cents to €1.65 (£1.30).