More than €4 billion was wiped off the value of Irish shares in trading yesterday amid what one trader described as a “bloodbath” across European stock markets on concerns over global economic growth.
The Iseq Overall Index fell by 5.5 per cent in Dublin, its biggest one-day fall since August 24th, 2010.
Bank of Ireland had €906 million wiped off its market value as its shares fell by just under 10 per cent.
Permanent TSB, which is 75 per cent owned by the State, experienced a 9.4 per cent drop in its share price, shedding €155 million in value.
Given the Irish economy’s vulnerability to a global shock, this latest market rout casts a large shadow over the promises of tax cuts and increased public spending by political parties in the general election campaign.
It also casts doubt on plans by the outgoing Coalition to float 25 per cent of AIB’s shares on the Dublin and London markets this year.
“While a prolonged downturn in the markets would be clearly unhelpful from an IPO pricing standpoint, the final decision . . . won’t be taken until much later this year,” said John Cronin, a banking analyst with Investec.
Industrial stocks
Irish shares fell across the board. Leading industrial stocks such as CRH (down 8 per cent), Cavan-based construction group Kingspan (down 10 per cent) and packaging company Smurfit Kappa (down 3.9 per cent), each took a hammering.
Budget airline Ryanair and ferry operator Irish Continental Group both dropped by more than 5 per cent.
Shares in UK airline IAG, Aer Lingus’s parent company that is run by Irish man Willie Walsh, fell by 6.2 per cent in London.
