The Dublin market reversed early gains to reach midday down over 2 per cent on fears over the health of major US mortgage lenders and a new record oil price.
At 12.47pm, the Iseq index of Irish shares stood at 4,590, down 96 points.
Leading the way down were the airlines as oil set a new record close to $146 a barrel. Ryanair shares fell back almost 6 per cent to €2.51 while Aer Lingus gave up 5.3 per cent to €1.25.
With concerns persisting over the asset quality of US mortgage lenders Fannie Mae and Freddie Mac, banks were weaker this afternoon.
Irish Life and Permanent was 2.6 per cent lower at €4.59, AIB was off 2 per cent at €8.05, Anglo Irish was 1 per cent off at €4.80 and Bank of Ireland was flat at €4.94.
Another big faller was Greecore, which saw more than 10 per cent wiped off the value of its shares today, falling to €1.58. Analysts said volumes were relatively light with just 190,000 shares traded in the stock but said sentiment to the company remained weak.
C&C Group, which today reported an 8 per cent fall in revenues during the four months to the end of June, saw its shares ease down 5.5 per cent to €2.57.
In an interim management statement, C&C said cider sales in the Republic of Ireland and the UK were 10 per cent lower although this was partially off-set by a 3 per cent increase in sales of spirits and liqueurs.
Other fallers today included Elan, down 2.6 per cent at €22.85 and Paddy Power off 3.2 per cent to €17.81.
Leading the gainers was housebuilder Abbey which added 7.6 per cent to €3.10 as the market digested its statement from yesterday.
