WITH international stock markets having mixed fortunes, the Dublin market drifted lower, with most of the activity concentrated on financial stocks.

AIB was 1 1/2p lower on 461 1/2p (439 1/2 sterling) after it has had discussions on a possible acquisition of Co-operative Bank in Britain, if Galileo's bid for Co-op's parent, CWS, is successful. Given the legal morass into which the Galileo bid has sunk, the chances of an AIB bid for the British bank in the short term are unlikely.

Bank of Ireland was unchanged on 680p, Irish Permanent was 3p higher on 606p while Anglo Irish Bank was on 81p ahead of tomorrow's results. Irish Life was 3p lower on 320p with no sign that the long-running dispute with the MSF union was any nearer a solution.

Elsewhere, Smurfit improved 3p to 160p, Kerry was 5p lower on 625p while James Crean was on 220p on continued speculation that the Inishtech disposal, aimed at restoring Crean's balance sheet had run into problems. Dana was unchanged on 23 3/4p after getting a good response to its placing and open offer. Almost 69 per cent of the shares on the offer were taken up by existing shareholders, with institutions taking up the balance.

Gilts were lower, especially at the longer end of the curve, where benchmark stocks were 55p lower on the day and producing a yield of 6.93 per cent. European bond markets were lower as investors became unsettled by the prospect of a French general election, the result of which could have a crucial impact on European Monetary Union.