The Irish stock exchange continued to feel the effects of recession fears as it slipped 2.8 per cent and the main financial stocks were downgraded.
At 2pm, the Iseq had fallen more than 189 points to 6571.14. The financials led the downward spiral after UBS downgraded the main banks on the back of concerns regarding the impact slowing economic growth on the commercial market.
AIB was among the hardest hit, falling by 4.25 per cent over lunch to €15.30, while Anglo Irish lost just over 6 per cent, or 59 cent, to reach €9.28 at 1330. Bank of Ireland, meanwhile, fell 3.3 per cent to €9.73 and Irish Life & Permanent lost more than 61 cent to €10.35.
The market got off to a bad start this morning as the market fell more than 191 points to 6,569.70 by 10am, mirroring a fall in shares worldwide.
Meanwhile, European shares were down 2 percent at midday as recession fears pulled commodity stocks lower and a broker downgrade for fraud-hit French bank Societe Generale depressed financials.
At 1200 GMT, the FTSEurofirst 300 index of top European shares was 1.92 per cent lower at 1,304.91 points, extending losses for January to more than 13 per cent, well on track for the worst month in more than five years.
Societe Generale, which last week disclosed a loss of $7 billion due to a fraud by a single trader, shed 7 percent after Citigroup downgraded it to "sell" from "buy" and halved its price target for the bank
US stock index futures dipped as concern about a US recession hurting the global economy lingered, but favorable corporate results, including from Corning, helped to modify pessimism. Dow Jones industrial average futures were down 29 points. Nasdaq 100 futures were down 6.50 points. Japanese stocks tumbled nearly 4 percent.
Analysts said the Japan fears came on top of persistent concern that the US would slip into recession. "There's more of the same on the US recession fears, and stocks also reacted to Goldman Sachs about Japan," said Bernard McAllinden, a strategist at NCB Stockbrokers.
"The second shoe to drop in the market has been the oil, miners and emerging market plays, and the Q4 earnings season has been about shock and horror for the financial companies in the United States."