HOUSE BUILDERS and banking stocks tumbled on the Iseq index yesterday as the Dublin market closed down 2 per cent in another torrid day for equity markets across Europe.

Irish stocks exposed to the building sector followed British building stocks down after a report by Merrill Lynch on the British housing market warned of a repeat of the early 1990s crash in the UK.

British building stocks closed down by as much as 21 per cent, and the contagion meant that Iseq-listed house-builder McInerney declined 14.12 per cent, falling 12 cent to €0.73.

Dealers observed that a lot of shareholders were "wielding the axe" on the building sector.

However, the Iseq's decline was predominantly led by the property-exposed large caps: Anglo Irish Bank, AIB and Bank of Ireland.

Anglo Irish Bank fell almost 3 per cent, losing 20 cent to finish at €6.80.

AIB dropped 37 cent to close at €11.18, down 3.2 per cent.

Bank of Ireland came off the worst of the large caps, losing 24 cent to close at €6.37, down 3.6 per cent compared to the previous day's closing price.

Ryanair opened strongly on the back of easing crude oil prices.

However, upward pressure on oil prices later in the day meant the stock could not sustain any upward momentum, and it finished down 2 cent at €2.98.

Independent News Media, again the subject of significant interest as it held its agm in London, fell 15 cent to close at €2.08, down 6.8 per cent.

Smurfit Kappa was the subject of an upgrade from credit ratings agency Moody's.

However this could not prevent the stock falling 8 per cent to €5.33, losing 46 cent, on a poor day across the board for Irish equities.