Market report: AN AIR of fear hung over the Irish market yesterday as the Iseq tumbled 3.2 per cent to close on 5,806.84.

Traders blamed a weak dollar and high oil prices. Data released later in the day, which showed US unemployment rose at its fastest rate in over 20 years in May, added to the general air of doom and gloom.

The financial stocks were the worst effected with the Iseq financial index off 3.96 per cent at 8,023.73.

Traders said there were large sellers of Anglo Irish Bank and Bank of Ireland active during the session driving them down 4.6 per cent to €7.50 and 6.6 per cent to €7.00, respectively.

Earlier in the session, Bank of Ireland fell below the €7 mark. Allied Irish Banks held up strongest, down just 2.4 per cent to €12.04.

The activity followed a note from Citi which was extremely bearish on the Irish financials. Citi downgraded them all but suggested that Bank of Ireland and Anglo Irish Bank were the most exposed to bad loans, particularly from large property developers. As one trader put it, the banks "were back at 1998 levels".

With spiking oil prices, up $9 to a record $137 a barrel, airline stocks also suffered.

Ryanair dropped over 6.5 per cent to €3.01, while Aer Lingus was down 4.29 per cent, to settle at €1.56.

There was an exodus from construction stocks as well with CRH plunging over 4 per cent to €22.32 and Kingspan closing at €6.12 down 3.7 per cent.

Builders's merchant and DIY specialist Grafton was one of the most resilient in the sector, down just 1.71 per cent to €4.60.

After what one dealer called an "absolutely brutal day" market players will be glad of the weekend break when they can reflect on a difficult week.

Settlement date: June 11th