Poor performances by financial stocks dragged the ISEQ down 70 points to 4922.79 yesterday, a 1 1/2 per cent fall on its previous close.

Analysts said the main banks were hit by concerns of growing competition in the British mortgage market as major players there moved to reduce their variable rates.

The drop also coincided with news of Bank of Ireland's DIRT tax settlement with the Revenue which suggested that some of its peers will face huge tax bills in the months ahead.

AIB shed 30 cents to €9.30 while Bank of Ireland fell 12 cents to close at €6.50. Irish Life & Permanent shed five cents to €8.65, while First Active bucked the trend by continuing its recent upswing, adding 30 cents to finish at €2.20.

Trading among the leading stocks was mixed, with Eircom staying at €2.72 and "still going nowhere", according to analysts. CRH, which was upgraded to a "buy" rating with a target of €23 by Deutsche Bank yesterday, added 16 cents to close at €19.25.

Shares in Elan, which benefited from the mapping of the human genome in recent weeks, shed €2.60 to close at €48.70. Analysts put the fall down to profit taking.

There was considerable volatility among some second line stocks with Jurys Doyle adding 30 cents to close at €6.85 ahead of its results next week. Ryan Hotels shed 7 cents to finish at €1.12. Heiton Holdings added 35 cents to close at €3.25 after posting a 20 per cent rise in profits but it is still some way off its year high of €4. IFG added 5 cents to €1.45.

The Nasdaq was down more than 2 per cent as the Dublin market closed last night hit by high-profile profit warnings issued in the technology sector. Irish technology stocks had mixed fortunes with Baltimore down more than 7 per cent at $15.25, Riverdeep was down 12 US cents at $19.37 1/2 and Iona down 37 1/2 US cents at $63.37 1/2.