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The Irish stock market took another hammering today with financials being the main culprits in dragging the Iseq down. The index was down just under three per cent with Irish Life and Permanent and Anglo Irish Bank being the biggest casualties. IL&P was down just over 32 per cent to €1.45 while Anglo fell 24 per cent to €1.40.

Elasewhere, the FTSE 100 index dropped to its lowest level in five years after Asian markets crumbled.

The London stock index suffered a drop of 4.6 per cent after tumbling to 3,665 points shortly after opening.

Increasing anxiety about the state of the global economy hit embattled banks and demand worries sent energy and mining stocks tumbling.

But Britain's top index recovered slowly to settle around 50 points down.

Other European markets also fell, with the Paris falling 5.5 per cent and Frankfurt down 3.5 per cent.

It follows another night of turmoil on Asian stock markets suffered as Hong Kong's Hang Seng index plunged by 12.5 per cent.

Japan's Nikkei index also fell by more than 6 per cent to its lowest close in more than quarter of a century after fears that emergency steps by world governments will be too late to prevent a global recession.

The yen continued to gain even after Group of Seven finance ministers today singled out the excessive volatility of the currency, which sent Japanese equities to their lowest in nearly three decades.