The Iseq index of Irish shares yet again underperformed its European counterparts yesterday, falling 1.7 per cent and ending the day at its lowest closing level for almost a year.

The decline, which wiped €1.7 billion off the index's value, was a result of ongoing negative sentiment about the US economy, which had a particularly bad effect on CRH, the Iseq's biggest member company after the banks.

CRH, which makes about half of its profits in the US, fell almost 4 per cent, or €1.20, to €29. As many as 2.6 million shares changed hands. One dealer said investors were starting to find it hard to believe that the positive performance of its European operations would offset the slowdown in the US.

Elsewhere the financials were hit by talk that CB Richard Ellis, the world's leading commercial property and real estate services adviser, has asked its clients to revise down corporate property valuations by about 10 per cent. While this only concerns properties in the UK, one Dublin dealer said that in the current climate it doesn't take much to send shares lower.

Irish Life & Permanent (IL&P) was the biggest loser amongst the banks, falling 4.9 per cent, or 85 cent, to end the day at €16.60. The decline was likely exacerbated by predictions from IIB Bank that house prices will fall by as much as 2.5 per cent this year. IL&P has the greatest exposure to the Irish mortgage market. Anglo fell 3.1 per cent, or 43 cent, to €13.50, while Bank of Ireland was down 2.3 per cent, or 30 cent, at €12.62.

AIB held up better, slipping just 5 cent, to close at €16.68.

Food group Glanbia added 1.2 per cent, or 5 cent, to end the day at €4.15 after announcing the acquisition of Canadian nutritional business Pizzey's Milling.