IT was an eventful week on the Irish and international markets with fears of an imminent rise in US interest rates spooking the markets.
In Dublin, Waterford Foods upset Irish analysts and investors; with a shock profits warning on [Wednesday which appeared to catch everyone off guard.
Mounting speculation about a delay in the start of EU monetary union, followed by Mr Alan Greenspan's hints about the future direction of US interest rates on Thursday, overshadowed international bond markets throughout the week.
A senior Bundesbank official became the latest to warn that Germany could miss the single currency deficit target. If this came to pass, he suggested that the launch of the euro should be delayed.
His comments appeared to lend credibility to suggestions that the German economy was not going to be able to achieve the 3 per cent deficit target set out under the Maastricht criteria, which would cause problems for the entire EMU project.
As these comments filtered through the markets, international bond markets almost immediately began to suffer.
US Federal Reserve chairman, Mr Greenspan then entered the fray, haunting international stock markets with the threat of an imminent rise in US interest rates in a pre emptive move against inflation.
The US central bank's Open Markets Committee meets next week, with the markets now waiting to see if US rates will rise.
In Dublin, the main casualties were in the financial sector with almost all of the major stocks being dragged lower on the back of the ailing bond markets. Sellers were also emerging in good numbers to offload some holdings.
The biggest news in the Dublin market, however, was undoubtedly the warning from Waterford, Foods that its profits would be sharply lower than expected.
The group told the stock exchange it was forecasting profits of around £19.7 million, well below market expectations that it would report profits of between £22 million and £24 million.
Waterford shares, which had traded earlier that day at 100p, were immediately marked down, with bid offer spreads in the market narrowing to between 70p and 80p.
The timing of the announcement, just weeks before the group's annual results, angered the stock exchange, fund managers and food sector analysts, many of whom had changed their recommendations for the stock from "hold" to "buy" recently.
The warning was based on trading difficulties at the group's Premier Dairies subsidiary, its British fruit juice subsidiary and the US" mozzarella cheese business over the final quarter of last year.
Further concerns about the companys financial health followed with reports that it may be forced renegotiate its loans with a bank syndicate after indicating that it may have breached its loan terms.
In other news, Independent Newspapers reported bumper results, announcing a 47 per cent surge in pre tax profits to £73.5 million, well ahead of brokers forecasts. Waterford Wedgwood also reported that its British crystal company, Stuart & Sons, was to close its Pengam plant in South Wales, with the loss of 82 jobs. Production is to be transferred to its remaining plant at its headquarters at Stourbridge, in the West Midlands.
