More than €3.5 billion was wiped off the value of Irish shares yesterday as the market fell to its lowest level in almost two and a half years.
Irish investors are now nursing losses of €8.1 billion this week alone.
Stock markets fell in all 18 western European markets amid a growing realisation that the global economy will not escape a US slowdown.
Fears intensified as concerns rose that further bad news from banks could emerge while US markets are closed for today's Thanksgiving holiday.
However, the Irish market was again hit more severely than its peers as investors steered clear, in particular, of financial and construction stocks in which the Dublin market is top-heavy.
The Irish Stock Exchange's benchmark Iseq index has now lost a third of its value since it peaked in February just before news of the impending subprime mortgage crisis in the US began to emerge.
The Dublin market has lost 19 per cent of its value in the course of this month alone. "Ireland is just loveless at the moment," said one Dublin trader who described yesterday's decimation as "a bloodbath".
The problems in stock markets are causing ripples further afield with Irish pensions falling into the red as a result of the dramatic falls in equities this month.
The average Irish managed pension fund has fallen in value by about 7 per cent in November, more than wiping out any gains in the year to date.
According to Noel Collins, a senior consultant with Mercer, the average Irish pension fund is now worth 5 per cent less than at the start of 2007.
Pensions have also been hit by movements in the dollar which hit a new low against the euro yesterday.
"The weak dollar alone would have knocked about 2 per cent off the value of a pension fund this year," said Mr Collins.
European stocks declined to their lowest in a year, led by banks, as crude oil prices edged towards $100 a barrel and the dollar slipped to new lows against the euro in the wake of the Federal Reserve's decision to cut its growth forecast for the world's biggest economy.
At lunchtime in New York, US shares were also trading lower.
In London, the FTSE 100 fell 2.5 per cent and the FTSEurofirst 300 index fell 2.4 per cent.
At midday in New York, the Dow Jones index was just 0.2 per cent higher for the year and back at levels seen in mid-August when the credit squeeze erupted.
The S&P financial index fell 2.1 per cent and is now at its lowest level in two years.
Equities worldwide have been hit over the past few months by fears of a meltdown in the US subprime mortgage market.
A report from the Organisation for Economic Co-operation and Development saying that deteriorating conditions in the US subprime markets could lead to losses of $300 billion in the highly-specialised collateralised debt obligation market exacerbated negative sentiment. - ( additional reporting, Bloomberg/Financial Times service)