The latest slump on oriental financial markets and early weakness on Wall Street have produced sharp falls on the main international stock markets. The post-budget bull run on the Irish stock market came to an end with shares falling 1.4 per cent and the ISEQ Overall Index slipped back below the 4000 level.
Stocks in London, Paris and Frankfurt followed Wednesday's lacklustre performance by registering losses averaging 2 per cent after Tokyo and Hong Kong took a battering overnight.
"The greed for the Christmas rally is being overcome by a resurfacing of the Asian flu," was how a London dealer summed up investors' sentiment. Bank stocks lead the decline in London with Asia-linked HSBC taking a hit after a J.P. Morgan profit warning.
Hong Kong stocks were hammered for the third straight session crushed by a rise in local interbank rates and a weakening Hong Kong dollar.
Hong Kong and Taiwan were hurt by a sharp plunge in the South Korean won, proving that even the region's healthier economies were falling victim to Asian currency contagion.
The Hang Seng sank 5.5 per cent, the Nikkei 2.6 per cent and Korean stocks 5.6 per cent.
The Dow Jones fell 150 points in the morning session which coincided with the afternoon session in Europe. At the close it was down 160 points at 7848.99.
