European shares tumbled today, as worries grow about the cost of borrowing for companies and the impact of problems in the US housing market.
The major European markets were over 2% lower, while the Dublin market took an even bigger hit, with the ISEQ down another 2.8% at 8,477. Banks and building materials groups were the main fallers.
The ISEQ has now fallen by more than 500 points this week, wiping almost €6 billion off the value of shares.
Sentiment on world markets was hit by news that Sydney-based Absolute Capital, a hedge fund half-owned by Dutch bank ABN Amro, had temporarily closed two funds because of problems offloading investments linked to the US sub-prime mortgage market, which targets people with poor credit histories.
The postponement of two debt financing deals by Alliance Boots and DaimlerChrysler also led to fears that tough credit market conditions are spilling over into the financing of corporate deals, which has boosted stock markets this year.
