European shares fell to their lowest close in five-and-a-half years today, with investors rattled by official data that showed that Europe's economy was plunging into a recession.
The FTSEurofirst 300 index of top European shares fell 5.4% to close unofficially at 825 points, its lowest close since May 2003.
The index has lost 22.4% so far in October.
But despite the low close, major European markets recovered ground in the late afternoon after falling up to 9% earlier in the day.
The London FTSE 100 finished at 3,883 points, down 5%, with banks and energy groups especially hammered. New data showed today that the British economy shrank more than expected in the third quarter of 2008, and for the first time in 16 years.
In Paris the CAC fell 3.5% to 3,194 while in Frankfurt the Dax lost 5% percent to finish at 4,520.
European carmakers - including Volvo, Peugeot and Renault - all issued negative statements today, sending their shares diving. Airlines were also down.
Russian markets have been suspended until Tuesday after a 13% fall this morning.
In Dublin, the ISEQ fell 61 points to 2,650, with Irish Life & Permanent posting heavy losses of nearly 30%. The bank dropped to €2.18, down 93 cent today. In volatile trade, Anglo Irish Bank closed up 5 cent at €1.85 after being more than 10 cent down earlier. AIB dropped 34 cent (10%) to €3.10. Bank of Ireland showed some losses most of the day, but closed unchanged at €1.60.
On Wall Street a short time ago, the Dow Jones was down 246 points (2.8%) and the Nasdaq was down 34 points (2%) at 1,570.
Earlier, Asian stock markets plunged to their lowest levels in years today as fears grew that the financial crisis is taking a heavy toll on corporate earnings.
Japan's Nikkei index plunged 9.6%, ending below the key 8,000-point level for the first time in more than five years as the yen soared and after a profit warning from tech giant Sony.
South Korean shares dived 10.6% - a day after a 7.4% plunge - after the domestic economy grew at its slowest pace for four years and Samsung Electronics reported a sharp drop in quarterly profit. Sydney ended with a loss of 2.6%, while Hong Kong closed 8.3% weaker.
