BOND and share prices plunged on the Irish market, following the 300-point sell-off in New York in the previous two trading days. And, despite the marginally better tone in New York yesterday, the situation on Wall Street remains deeply unstable with indications that further falls in prices are likely if next Friday's non-farm payroll figures show strong growth in US employment.

With the yield on US treasury bonds moving above 7.1 per cent, the Irish bond market also took a hit, especially at the long end of the market where prices fell by 60p to bring a yield on the 2015 benchmark stock of 7.08 per cent. The Irish market as well as coping with external factors, this week has the monthly banking figures and the quarterly Exchequer returns on Thursday. Neither of these figures is expected to produce anything earth-shattering but the bank lending figures will be watched to see if the strong level of growth has been maintained.

Predictably, given the slide in bond yields, it was the yield-sensitive financial stocks that took a battering yesterday and both AIB and Bank of Ireland were marked down savagely in sizeable trading. AIB closed down 18p on 415p while Bank of Ireland was 25p lower on 605p.

Other financials were also weaker, with Irish Life down 13p on 318p although a substantial part of this fall was due to trading, less the 8 1/2p dividend. Irish Permanent was 7p lower on 595p, after dipping as low as 590p, although Woodchester - a special situation stock - was 1p firmer on 276p.

Among the industrials, losses were less pronounced although CRH dropped 7p to 615p while Smurfit was 4p lower on 163p. Greencore - now facing industrial action from sugar factory workers as well as a boycott by beet growers - lost 3p to 350p, while Avonmore was 10p lower on 235p.