Trade on the Irish stock exchange mirrored what was happening on world markets today, with financials leading an early plunge before staging something of a recovery in the afternoon.
The Iseq index of Irish shares was down 129.34 points or 2.98 per cent at 4215.66 ahead of the close today, but traders said it had been down by as much as 7 per cent at around noon, when the market bottomed out.
Investors reacted to the news that Wall Street giants, Merrill Lynch and Lehmans are to be sold by selling European and Irish banking stocks.
"What's happening in global markets was driving all of it today," one trader said. "The financials were the focus of most of, there was very little volumes outside of that."
All the Irish banks suffered as a result, with leading home lender, Irish Life and Permanent coming off worst. Its price was down 13.33 per cent at ¤5.85 at the close of trade.
In London, the FTSE-100 index at the close was down 212.5 points at 5204.2.
In Europe, news agency Bloomberg reported that The Dow Jones Stoxx 600 Index retreated 3.5 per cent to 270.68 for the biggest decline since March 17th.
The Dow Jones Stoxx 600 Banks Index dropped 6.2 per cent, the most since January, as 60 of 62 stocks declined.
