Banks bore the brunt of the sell-off today as the brief rally in the Iseq came to an end. A flurry of selling in the afternoon saw the Iseq drop 2.54 per cent, as it shed 119.15 points to 4,570.72.
Financial stocks were weak throughout Europe and in early trading in the US as nervousness about the health of banks crept back into the market after JP Morgan Chase signalled that it may write down $1.5 billion in mortgage assets.
Very little liquidity in the Irish market and very thin volumes ensured that Irish bank stocks were hit harder.
Anglo Irish Bank took a hammering ahead of its pre-close trading statement tomorrow, with its share price plunging nearly 12 per cent as it lost 81 cents to close the day at €6.02.
Irish Life & Permanent fared little better as 9.43 per cent was knocked off the value of its shares. By the end of the day it had shed 64 cents to €6.15.
AIB was just over 4 per cent weaker at €8.85, while rival Bank of Ireland dropped 21 cents to €6.10.
On a more positive note, United Drug closed the day nearly 2 per cent stronger following its robust trading statement in which it said it expects to deliver another period of double-digit profit and earnings growth for the year to September 30th, despite the fall in the value of sterling. It advanced 7 cents to €3.66.
Construction stocks also held up well relative to their peers but volumes were generally light across the board. Grafton picked up 4 cents to €4.39, while Kingspan was 3.4 per cent better off at €7.60. McInerney was more than 1 per cent stronger ait €0.375, while CRH eased back 16 cents to €18.88.
Despite the continuing fall in oil prices, Ryanair failed to get any momentum and it slipped 1 cent to €2.91.
European stocks fell for the first time in three days as a retreat in metals prices sent mining companies lower and investors speculated bank losses will deepen.
BHP Billiton, the world's largest mining company, tumbled after gold, platinum and copper declined, while BNP Paribas SA and UniCredit SpA led banks lower following the news of possible writedowns at JPMorgan Chase.
National benchmark indices fell in 12 of the 18 western European markets. The UK's FTSE 100 slipped 0.1 per cent. France's CAC 40 fell 0.6 per cent, and Germany's DAX lost 0.4 per cent.