Concerns over the health of US mortgage companies Freddie Mac and Fannie Mae continue to weigh on financial stocks throughout Europe and Irish banking stocks fell in line with their European counterparts on another dismal day for the Iseq.
A spike in the oil price on rising tensions between the US and Russia and a weaker dollar only helped to exacerbate problems for markets and by the close of business, the Dublin market was more than 2 per cent weaker as it shed 93.74 points to 4,203.63.
Overall, Irish banking stocks were down around 1.9 per cent, more or less in line with Europe. Irish Life & Permanent's share price took the heaviest hit, losing more than 5 per cent of its value as it shed 28 cent to €5.07.
Bank of Ireland was 4 per cent weaker at €5.169, while Anglo Irish dropped 12 cent to €5.33. With some decent buyers around for the stock, AIB was spared the worst of the sell off among the banking stocks as it closed the day just 3 cent weaker at €7.90.
CRH came under pressure as Swiss peer Holcim said that its second-quarter profit dropped after US construction slowed and transport and raw-material costs increased. CRH dropped by more than 4 per cent, with 70 cent knocked its share price to €16.05 although volumes were light with around 900,000 shares traded.
However, other construction related stocks fared better. Grafton tacked on 1.5 cent to €3.80, while Kingspan was nearly 1.7 per cent stronger at €6.64. McInerney was up nearly 6 per cent at €0.36.
Rising oil prices took their toll on airline stocks and Ryanair was under pressure towards the end of the day eventually closing more than 3 per cent weaker at €2.54. More than 5 per cent was knocked off Aer Lingus's share price as it ended the day at €1.468.
European stocks fell for the third time this week as concern deepened banks will report more writedowns. HSBC dropped 2.8 per cent, and BNP Paribas lost 2.5 per cent after Citigroup analysts predicted three US banks will write down a combined $6.4 billion this quarter.
National benchmark indices declined in 16 of the 18 western European markets. Germany's DAX slipped 1.3 per cent and France's CAC 40 fell 1.4 per cent. The UK's FTSE 100 was little changed, as gains by commodity producers offset declines at banks.