European stock markets closed sharply lower this evening with losses of more than 2% in London and Paris on fresh concerns over the effects of the US sub-prime mortgage crisis on the banks.

In London, the FTSE 100 index tumbled 123 points (2.2%) to 5,407. Among the main losers were travel group Thomas Cook - down 9% to 184p - and Cadbury, which fell 7.5% to 592p. In Paris the CAC lost 2.5% to 4,232 and in Frankfurt the DAX was down 1.3% at 6,305.

In Dublin, the ISEQ resumed its downward trend, losing 100 points to 4,687. Banks were again weak, with Anglo Irish down 8% to €4.86 in late trading after Davy lowered its earnings forecast for 2009. Ryanair dropped 20 cent to €2.66, while building materials group Grafton lost 18 cent to €2.88 after a trading update which said its earnings had fallen in the first half of the year.

Wall Street markets rose despite a fall in financial shares due to worries about the financial situation of mortgage companies Freddie Mac and Fannie Mae. Helped by solid sales figures from Wal-Mart, the Dow Jones was up 36 points to 11,183 and the Nasdaq was 17 points higher at 2,252. Earlier, Tokyo's Nikkei 225 index limped 15 points higher to close at 13,067.