Greece factor weighs on Iseq as banks lose ground

Iseq: 2,898.95 (–51.22) Settlement date: April 21st:STANDARD Poor's decision to downgrade its credit outlook for the US, coupled with speculation that Greece may have to restructure its debts, weighed on the Iseq yesterday which sold off with global markets.

The Iseq closed just over 48 points lower, or 1.6 per cent, at 2,902.09. “It was really all driven by macro events,” one Dublin broker said, explaining that European markets were hit by a “broad-based sell off”.

“We had some pretty nasty losses across the board,” he added. Index heavyweight CRH underperformed its sector, sinking 4 per cent to €15.49 on a day that left its peer group down an average of 2 per cent.

In the airline space, low-fares carrier Ryanair was also hit by the negative sentiment, falling about 2.5 per cent to €3.34.

The news that ratings agency Moody’s had downgraded Irish banks to junk status “obviously wasn’t a positive”, the trader said, but it was “just negative noise rather than anything new or insightful”. It was simply a follow- on from the sovereign downgrade announced by the ratings agency last Friday, he said, and so did not surprise the market.

However, the “Greece factor” weighed on the sovereign bonds of peripheral nations such as Ireland, and as a result the banks sold off too.

Irish Life Permanent and Bank of Ireland finished fractionally down at 16.4 cents and 26.4 cents respectively, while AIB was 1.5 cents down at 22 cent.

Elsewhere, mining company Kenmare Resources issued an interim management statement that was weaker than expected, and the stock closed down slightly at 53 cents.

Brokers noted a preference for defensive stocks emerging as markets weakened. Glanbia gained from this, adding more than 1 per cent to €4.60.