With the takeover rumour bubble finally bursting, AIB shares fell heavily on the Dublin and London markets and the shares have now lost all of the gains from the extraordinary trading during the past few weeks.

After falling 55 cents to €15.15 (£11.93), AIB shares are now below their level at the beginning of the year and dealers believe the shares may now begin to start trading more in line with the British banking sector.

It was confirmed yesterday that the London Stock Exchange is investigating the takeover rumours which propelled the share price to record levels in recent weeks. The inquiry follows fresh takeover speculation on Wednesday as the bank announced its financial results.

Meanwhile, there was little activity in the other financial shares with Bank of Ireland three cents easier on €19.07 (£15.02).

Industrials were generally firmer. Kerry continued its recent good run and was 20 cents higher on €11.30 (£8.90), although Smurfit was one cent easier on €1.76 (£1.39).

Some of the second-line industrials, which have found it increasingly difficult to generate interest from fund managers, managed to notch up some gains. After good results, Golden Vale was another four cents higher on €1.10 (87p), while Abbey gained seven cents to €3.47 (£2.73). Clondalkin was 10 cents higher on €5.60 (£4.41) and Grafton added 30 cents to €17 (£13.39).

IWP, which has suffered after a recent profits warning, continued to recover and was 13 cents higher on €1.75 (£1.38), while Kingspan added seven cents to €2.37 (£1.87).

Irish Nasdaq stocks were mixed, with Icon and Iona falling sharply for no obvious reason other than the traditional volatility of the automated market, while CBT and Saville were both firmer.