The heavy overnight fall on Wall Street had a limited impact on European stock markets yesterday, with the early recovery on Wall Street during the European afternoon session limiting losses. In Dublin, dealers said that trading was relatively low key with no sign of any selling in size.

In London, the FTSE 100 fell for the third day running after the turbulence on Wall Street, although the index rallied from its low point after Wall Street opened stronger. Dealers warned that any further weakening on New York would undoubtedly drag London share prices lower, but that the prospect of lower interest rates and increased acquisition activity was supporting the market.

Wall Street opened firmer after the 97 point fall, a fall that dealers believe was an over reaction to the US budgetary crisis and the poor results from Motorola and Apple. Bargain hunters were out in force, scooping up technology stocks that have taken a beating this week. Dealers warned, however, that the market remains volatile with the results season still ahead and the budget impasse still unresolved.