The Dublin stock market closed down almost 3% following steep falls for the banks.
Shares in Europe and New York were weak after poor US data on unemployment and house sales fuelled fears that the recovery in the US is faltering.
In Dublin, the ISEQ index dropped 82 points (2.85%) to 2,797, with bank shares hit. Bank of Ireland was down 9% at 61 cent, while Irish Life & Permanent fell 7.7% to €1.41. Building materials stocks were also lower, with CRH down 4.2% to €16.42.
In London, British shares hit a 10-month closing low. The FTSE fell 2.3% to 4,806 - its lowest close since September 3, 2009. Elsewhere, Frankfurt’s DAX index ended down 1.81% to 5857, while the CAC lost 3% to 3340.
US stocks were experienced a turbulent session, amid a slew of negative economic news, including a report showing new claims for US unemployment benefits jumped more than expected last week.
After opening in positive territory, stocks had fallen by 5.50pm, threatening to extend recent losses. The Dow Jones fell 0.4% to 9,731, after two days of heavy losses on Wall Street. The Nasdaq index lost 0.6% to 2,097.
Before the opening bell the US Labor Department said initial claims for jobless benefits rose to 472,000 in the week ending June 26, an increase of 13,000 from the previous week.
Adding to the ill feeling, pending US home sales fell off a cliff in May after the expiration of a deadline to obtain a government homebuyer tax credit, an industry group said.
Earlier in Asia, Tokyo's Nikkei fell 2% to 9,192, with exporting firms affected by a stronger yen. Hong Kong's market was closed for a holiday.
