Financial stocks with exposures to peripheral European economies were hit today as investors remained concerned that Ireland’s woes will have a ripple effect.
“Contagion shows no sign of slowing down with the market clearly moving on to matters in Iberia,” one Dublin analyst said.
Irish financials remained under severe pressure today after the Government confirmed on Sunday it will accept EU/IMF aid, which will result in significant restructuring of the banking sector. Equity holders will be “key contributors” to the “new era” of Irish banking, a broker said. As this reality sank in, Bank of Ireland shed more than 19 per cent, or nine cent, to just below 39 cent. Irish Life & Permanent lost more than a quarter of its value - 31 cent - to finish at 84 cent. Both names recorded very high volumes.
AIB fell about about three cent to just under 41 cent.
In the UK, Royal Bank of Scotland and Lloyds Banking Group were off more than 4 per cent apiece, which brokers attributed to their Irish exposure.
On the Irish exchange, Aryzta, Ryanair and Paddy Power were among the few names to end in positive territory, as most of the market was weighed down by the country’s sovereign crisis.
Stocks with stretched balance sheets found themselves under particular pressure. Packaging group Smurfit Kappa shed 18 cent to finish at €7.37 despite announcing the proceeds of a €250 million accounts receivable programme will be used to repay a €210 million securitisation, and bank debt. Independent News & Media fell 5 per cent, or about three cent, to just over 54 cent.
Elsewhere, cement stock CRH traded very strongly through the morning session, tipping €15.40 at one point. It lost ground over the course of the afternoon and was slightly negative on the day, closing down 3.5 cent at €14.80, but still outperformed its European peers.
Overall the Iseq index was down 1.4 per cent.