Fears about the macroeconomic outlook for the global economy sent the Irish market into a tailspin today, as it lost 162.46 points or 3.7 per cent to fall back to 4,282.32.
The main movers on the day were financial stocks, which were down almost 6.5 per cent by lunch-time. Following their US counterparts, which fell back due to economic concerns, as well as European financial stocks, which suffered due to additional liquidity fears following the ECB’s tightening of its funding rules, Irish banks went into a downward spiral.
Allied Irish Bank finished the day down 52 cent or 6.2 per cent at €7.89, but was down by as much as 9 per cent at one stage. Anglo Irish Bank tumbled by 34 cent or 6.1 per cent to €5.24, while Irish Life & Permanent came off its lows from earlier in the day to close down 32 cent or 4.8 per cent at €6.46.
Bank of Ireland also recovered somewhat in the late afternoon but still gave up 25 cent or 4.5 per cent to finish the day at €5.28.
Construction stocks were also hit today, with all the major names dropping back. CRH lost value throughout the day, closing down €1.01 or 5.5 per cent at €17.21, while Kingspan and Grafton fared marginally better. Kingspan gave up 22 cent or 2.7 per cent to finish the day at €7.79 and Grafton lost 7 cent or 1.8 per cent to drop back to €3.50.
Fears over consumer spending saw Paddy Power lose 65 cent or 4.6 per cent to finish at €13.50, while Ryanair was also hit by declining consumer confidence as it fell back by 7 cent or 2.7 per cent to €2.57.
Recruitment firm CPL reported better than expected interim results today, although its outlook for the second half of the year looks poor. It fell by 3 cent or 1.5 per cent or to €1.92.
In the US, it was another day of poor economic data, as new figures showed that unemployment rate spiked to 6.1 per cent in August - the highest in five years - as 84,000 jobs were lost in August, the eighth consecutive month of job losses.
On Wall Street, stocks looked likely to finish the week with the biggest losses since the start of the year. Merrill Lynch lost more than 5 per cent following a “sell” recommendation from Goldman Sachs,
Across Europe, stock markets fell sharply on opening, following losses in Asia and the US overnight. In the UK, the FTSE 100 dropped 121.4 points, or 2.3 per cent to fall back to 5,240.7. Over the week, the FTSE fell by 7 per cent, its sharpest weekly decline in six years.
In Paris, the CAC 40 fell back by 2.5 per cent, while in Frankfurt the DAX closed down 2.6 per cent.
