Irish banks lost ground again today, as European banks bore the brunt of wider market weakness triggered by investor caution.
By 1.52pm, the Iseq was marginally off, trading at 2,972.20, a loss of 1.78 points.
Both Bank of Ireland and AIB were down throughout the morning, following sharp losses yesterday. By the close of trading yesterday, Bank of Ireland had lost 6 per cent as investors digested to Friday's news that the Government has taken a further 16 per cent stake in the bank in lieu of a €250 million dividend. By 1.45pm today, the shares were off 3l5 per cent to €1.14.
AIB was also hit by the news, trading at 4.4 per cent down today at €1.04.
Irish Life and Permanent seemed to escape the worst of the news, losing only 0.6 per cent to €3.13 today. This follows a gain of 4 per cent yesterday, when the stock closed at €3.15. Yesterday's gain was attributed to press speculation that British group Resolution may be considering a bid for the group.
Elsewhere, food group Kerry was up 2.6 per cent after it revealed net profit rose to €201.2 million last year. By 1.45pm, the stock was trading at €23.35.
Dragon also gained after the company said it was hopeful of progress on a gas sales deal in Turkmenistan this year. The shares added 2.4 per cent to reach €5.35.
European shares were lower at midday with investors trading cautiously after data showed German business sentiment fell for the first time in almost a year. Banks bore the brunt, with Commerzbank sliding 6.2 per cent after saying it expected 2010 to be a difficult year when posting a worse than expected fourth-quarter loss, hit by weak trading results and loan loss provisions.
The DJ STOXX banking index fell 1.2 per cent, while BNP Paribas, Societe Generale, Credit Agricole, Natixis, UBS, Credit Suisse, Deutsche Bank and KBC Groep were down 0.6-4.2 per cent.
By 12.17pm, the FTSEurofirst 300 index of top European shares was 0.5 per cent lower at 1,018.12 points, having hit a three-week high at 1,029.80 early in the session. The index is still up 57 per cent since hitting a record low in March last year.
Investors awaited testimony from Federal Reserve chairman Ben Bernanke on Wednesday and Thursday, which was expected to shed light on how soon key US interest rates may start to rise after the surprise increase last week in the rate the Fed charges banks for emergency loans.
Economic data also dampened spirits. The Munich-based Ifo think tank said its business climate index, based on a monthly survey of 7,000 firms, fell to 95.2 from 95.8 in January, below a forecast for 96.1.
Reuters
