Iseq tumbles below 2,400 over US rating downgrade

Iseq: 2,395.73 (-110.75) Settlement date: August 11th: IRISH EQUITIES were hit by the general market sell-off yesterday as investors reacted to Standard Poor's announcement late Friday that it had stripped the US of its triple-A credit rating.

The Iseq index set a fresh low for the year, tumbling below 2,400 to close almost 4.5 per cent down. With stock-specific news thin on the ground, the driving force behind the sharp fall was believed to the US downgrade, which was confirmed after European markets closed on Friday. Attempts by authorities such as the G7 and the ECB to bolster investor confidence before markets re-opened yesterday failed to arrest the equity market correction that began last week.

Though damage was inflicted pretty much across the board, drug manufacturer Elan suffered one of the heaviest losses, falling almost 9 per cent, or 60.5 cent, to €6.19.

Aviation stocks also tumbled. Former flag carrier Aer Lingus released figures showing that while the number of passengers flying with the airline was 3 per cent higher in July, the load factor – the percentage of seats filled on its flights – slipped by 1.1 points to 84.7 per cent. The stock closed almost 5 per cent down, or three cent, at 59 cent. Rival airline Ryanair also sold off, with its share price retreating more than 4 per cent, or 13 cent, to €2.97.

Cement giant CRH fell as far as €11.81 at one point during yesterday’s session. It closed at €11.92, almost 30 cent down on the day.

Irish oil company Petrel Resources, which is listed on London’s junior market, said it had been overlooked in a fourth oil-licensing bid round in Iraq. “Failure to qualify is a set-back, but we have overcome many similar challenges since starting Iraqi work twelve years ago,” said managing director David Horgan. The stock fell almost 18 per cent on London’s AIM market.