World stock markets fall sharply today as fears about the US financial system escalated. The Irish market was one of the worst affected by the fall-out from the emergency sale of US investment bank Bear Stearns.
There were reports that some Dublin stockbroking companies called staff into work on the St Patrick's Day holiday to cope with the sell-off. Dublin's ISEQ index closed down 278 points, or 4.6%, at 5,722. This was its lowest close for more than three years and wiped almost €3 billion off the value of shares.
Financial stocks were worst hit, with shares in Anglo Irish Bank falling by more than 16% to €6.88 in late trading and AIB down almost 7% at €12.07. House builder McInerney lost 10% to €1.15.
In London the FTSE closed down 217 points, almost 4%, at 5,414. In Paris the CAC 40 fell 3.5% to finish at 4,431 while in Frankfurt the Dax lost more than 4% to end the day at 6,452 as a profit warning from Siemens sent its shares tumbling.
US markets were also lower, with the Dow Jones down 82 points to 11,869 and the Nasdaq off 40 at 2,172. The Dow's losses were limited by gains in JPMorgan Chase, which bought Bear Stearns at a knockdown price.
Earlier, Japanese stocks slumped 3.7%, ending below 12,000 points for the first time since August 2005 amid worries about a surging yen and turmoil on Wall Street. The Nikkei ended down 454 points at 11,787.
The latest falls have been sparked by the emergency sale of Bear Stearns, whose financial position deteriorated dramatically last week. It was hit by the crisis on world credit markets, which means banks have become more wary of lending to each other. The fear is that this could affect the wider world economy. The US Federal Reserve last night cut one of its interest rates in an attempt to keep markets working normally. Record high oil and gold prices, as well as a soaring euro, have also affected sentiment.
