Market report:Underperforming financial stocks dragged the Irish market down slightly yesterday, as negative sentiment towards the housing and mortgage markets persisted.

Heavy trading in Allied Irish Bank left it 19 cent lower on the day, at €21.26, while Bank of Ireland was down five cent, closing at €16.05.

The impetus provided by UBS's "buy" recommendation last week to Irish Life & Permanent has finally worn thin, and the stock tumbled yesterday by 2.18 per cent, or 45 cent, to €20.20. Anglo Irish Bank also lost out yesterday, ending the day down 1.33 per cent, or 21 cent, at €15.55.

A solid set of 2006 results released yesterday boosted IFG's share price by 1.46 per cent, or three cent, to €2.09.

Although United Drug's trading statement was in line with management expectations, it failed to inspire investors as no mention was made to any specific acquisition targets. The stock traded down by 1.77 per cent, or seven cent, to €3.88.

The One51-Doyle Group consortium confirmed yesterday that it may make a possible takeover bid at €20 per unit for Irish Continental Group.

This news "put the cat among the pigeons", according to one trader, and lifted the company's share price by 2.82 per cent, or 55 cent, to €20.05.

Meanwhile, continued speculation over possible stake-building in Independent News & Media boosted its share price by 1.71 per cent, or six cent, to €3.56.

Smurfit Kappa also put in a strong performance yesterday. The stock climbed by 5 per cent to a high of €19.90 at one point, although it slipped back down somewhat over the course of the day.

Nevertheless, it closed the day up 2.62 per cent, or 50 cent, at €19.60.