US stocks dropped for the first time in three days yesterday afternoon, led by financial companies, on concern banks will be saddled with more credit-market losses and the Federal Reserve will not cut interest rates enough to stimulate growth.
JPMorgan Chase and Citigroup led banks lower after an analyst said Fortis, Belgium's biggest financial services company, faces more writedowns from mortgage-related securities. About three stocks dropped for every two that rose on the New York Stock Exchange.
The Nasdaq Composite Index also slumped as it approached the close.
The downward move came after European stocks ended flat as a rise in tech stocks was offset by a steep slide in Fortis.
Meanwhile, French bank Société Générale fell a further 2.6 per cent in the wake of the rogue trader scandal as analysts at UBS, Deutsche Bank and Goldman Sachs downgraded the stock.
The Iseq ended down almost 53 points, or less than 1 per cent lower, after rallying early in the session.
Data from the Irish Stock Exchange (ISE) business review of 2007 showed the value of equities traded on the ISE last year rose 54 per cent year-on- year to a total of €199 billion.
Average daily turnover of €784 million was ahead of 2006 figures of €511 million, while transaction volume was also on the rise.
Minister for Finance Brian Cowen told RTÉ radio yesterday that he did not believe that the difficulty seen in the world markets of late would have a negative impact on the Irish economy, and that he had considered the risk factors when compiling his recent budget.
However, according to the stock exchange review, the sub-prime crisis and recession fears that hit global markets did not leave the Iseq unscathed.
Financials such as Anglo Irish have felt the brunt of the volatility, with Anglo falling 1.8 per cent in yesterday's trading to €9.82 at the close of the session, and Irish Life & Permanent seeing a 2.3 per cent drop to €10.95.
Meanwhile, John Sheehan, NCB Stockbrokers, warned that the Irish market is not out of the woods yet.
He said that volatility on the Irish market has been exceptionally high recently, and is "unlikely to have neatly passed".
