An autumn-like chill crept into Irish and European markets yesterday as expectations increased that the US Federal Reserve would raise interest rates when it meets on August 24th.
The ISEQ was back one per cent in a session which had Telecom Eireann falling back to its lowest point since flotation. Analysts squarely put the blame on sectoral weakness and the declining international situation. Telecom closed 2.2 per cent lower, losing 10 cents to €4.40 (£3.47).
One contributory factor to the sectoral weakness was the price reduction introduced by MCI WorldCom in the US, sparking fears of a price war. For holders of the stock, the current price still represents a 13 per cent gain on the initial public offering price of €3.90 (£3.07).
Most other stocks also came under selling pressure, with the banking sector being particularly vulnerable to change in investor sentiment. AIB was down five cents to €11.90 (£9.37) in thin volumes, while Bank of Ireland slipped 12 cents to €8.53 (£6.72).
Despite an upgrade to "trading buy" from `'market out-performer" by Goldman Sachs, CRH was back 44.7 cents to €19.053 (£15.01). Goldman stated it viewed CRH as attractive "on both a fundamental and momentum basis", and gave a target price for the stock of €23.00 (£18.11).
Smurfit was back after its recent good run, down the equivalent of five cents when it closed at £1.90 sterling.
But Clondalkin bucked the trend, gaining 63 cents or 10 per cent in a £4.50 sterling (€6.75) deal. This represents an increase of close to 15 per cent on the €5.90 price it was at a week ago.
Ryanair's quarterly results were "at the better end of expectations", according to one dealer. Nonetheless, its 13 per cent increase in pre-tax profits failed to inspire. It traded at £5.99 sterling (€8.98), down 37 cents.
