Tullow climbs as Iseq falls

Exploration group Tullow Oil was the main climber on the Irish and London stock exchanges on an overall weak day for equity markets…

Exploration group Tullow Oil was the main climber on the Irish and London stock exchanges on an overall weak day for equity markets.

The Iseq index of Irish shares fell 1.3 per cent, dropping 84 points to a value of 6,390.

Tullow's share price jumped 25 per cent after it announced positive findings from an oil well off the coast of Ghana. Independent News & Media and United Drug also rose, while CRH and Ryanair were among the stocks to fall.

Anglo Irish Bank rose 8 cent to €9.20 ahead of the publication of its interim results tomorrow morning.

European shares were weighed down by banks and insurers after UBS sought to purge itself of the impact of the credit crisis and Swiss Re announced another round of writedowns.

UBS shares fell 4.5 per cent and were the top losers in the broader European equity market. Investors were concerned that the credit crisis, which has visited Europe's biggest writedowns on UBS, had badly damaged the bank's earnings power, as signalled by a sharp slowdown in new money entrusted to it by its large base of wealthy clients.

Swiss Re, the world's largest reinsurer, weighed on the insurance sector, after reporting a steep drop in first-quarter net profit that took nearly 5 per cent off its shares.

The FTSEurofirst 300 index of top European shares closed down 0.5 per cent at 1,351.25, having risen from a decline of as much as 1.1 per cent as stocks on Wall Street pared losses. The index has rallied about 13 per cent since hitting near three-year lows in mid-March.

The DJ Stoxx banking index was down 1.2 per cent as shares in HSBC, Societe Generale and Credit Suisse fell between 1.5 and 2.6 per cent.

Meanwhile, first-quarter net profit at Swiss Re dropped by half, a bigger fall than expected, and the world's biggest reinsurer made fresh credit writedowns of 819 million Swiss francs ($779.3 million).

Munich Re shares fell 1.8 per cent, while Zurich Financial lost 1.6 per cent, and Allianz and AXA fell between 1.9 and 2.1 per cent.

The European pharmaceutical sector fell 1 per cent, as drugmaker Shire slipped 4.6 per cent after analysts said data suggested one of Shire's biggest drug hopes was not capturing as big a market share as expected.

Roche, GlaxoSmithKline and AstraZeneca fell between 2 and 2.4 per cent.

Around Europe, Britain's FTSE 100 index ended flat, Germany's DAX index dropped 0.5 per cent, and France's CAC 40 fell 0.4 per cent.

Meanwhile, oil rose to a record $122 a barrel, while US stocks edged higher after home lender Fannie Mae eased jitters over a big loss and investors latched onto hopes that Yahoo could resume takeover talks with Microsoft.

The dollar extended declines against the euro and other major currencies for a second day as currency and fixed-income investors soured on quarterly results at Fannie Mae, the largest provider of US home financing, which came in weaker than expected.

US government debt prices rose as Fannie Mae's $2.5 billion loss - its third quarterly loss in a row - renewed credit jitters and raised the safe-haven appeal of US Treasury bonds.