Irish banks’ share prices tumble as market fears over UK Brexit rise

Banks in Ireland have slumped on fears that the Brexit vote could lead to the UK leaving the European Union, as investors bet that their share prices would rise, according to a report.

Irish shares closed down 0.3pc, or 0.4%, at €12.98, while the British pound fell 0.1pc to $1.2727.

The Irish dollar rose 0.8pc to 99.85p.

The decline in Irish share prices follows a plunge on Wednesday when Bank of America Merrill Lynch said it had warned the Irish market about the impact of Brexit on the Irish economy.

In a statement, the bank said its concerns over the impact on the financial sector in the UK were exacerbated by the uncertainty surrounding Brexit.

“While we have not seen the full impact of the UK’s departure from the EU, we expect that the immediate impact on Irish economic activity will have been significant, and the full effects will be felt by investors, particularly in the short term,” it said.

Investors also lost confidence in the US stock market, which had its best month in more than a decade on Wednesday, after the Dow Jones Industrial Average lost more than 200 points.

The Dow fell about 4pc on Wednesday and the S&P 500 shed about 1pc.

On Friday, the Dow will open its next trading day for the first time since March 21, after its record high of 26,812.

The Dow has closed above its record for five consecutive sessions.