AIB lost 20 cents to €12.05 despite a generally positive response to the interim figures. Davy upgraded its forecasts for this year and next by about 1 per cent and issued a buy recommendation on the stock, while Dresdner Kleinwort Wasserstein also raised its stance on the bank to add from hold.

Shares lost nearly 1 per cent of their value yesterday as international markets were hit by worries about the US economy and weakness in the banking sector.

A steep increase in bad debt provisions at Barclays knocked banking stocks in Britain, while oil stocks also suffered globally after disappointing earnings from Shell and Exxon Mobil.

In Dublin, the market again outperformed on the way down, faring better than stocks in Britain and the US. But the main banks could not completely avoid the negative sentiment despite buying interest in the wake of AIB's half-year results.

Bank of Ireland also lost ground, shedding 30 cents to €11.30 while Irish Life & Permanent dropped 15 cents to €12.30.

With most of the activity confined to the leading stocks, CRH was another of the losers. The company, which is reported to be in exclusive talks to acquire a Polish lime plant, ended the day 45 cents lower at €14.80, while Kerry Group lost 50 cents to €13.30.

Elan shares gained 40 cents to €2.40 in Dublin as the market played catch-up with the overnight performance in New York, where the shares had risen 14 per cent on news of its recovery plan. Yesterday they again slipped back by 2 per cent in the US, however.

Among the good news stories, Galen was up 44 cents to €5.28, while Riverdeep gained 35 cents to €2.70 in the wake of its results.