Reinsurers came under renewed pressure as their exposure to the damage wrought by terrorists in the US last week became clearer. Swiss Re, the world's second largest reinsurer, added to earlier heavy losses with a drop of 6.6 per cent to SFr134 (€90.84) as it said it faced an after tax burden of about SFr2 billion after the attacks.

Munich Re, the world's number one, fell 6.9 per cent to €239.20 as it more than doubled its forecast for 2001 claims to €2.1 bilion as a result of the US attacks. Munich Re added, however, that the expected sum for claims, by far the largest it has ever faced, would not prevent it from keeping its dividend payout at 1.25 a share.

Losses elsewhere were widespread, with Zurich Financial dropping 11.8 per cent to €272. Hannover Re fell 15.2 per cent to €48.36. France's Axa fell 6.3 per cent to €19.35, while ING of the Netherlands lost 8.7 per cent to €24.65, and Allianz in Germany dropped 6.5 per cent to €218.80.

The airlines continued to have a bumpy ride. Lufthansa dropped to a six-year low after the group issued its second profits warning of the year on Wednesday. The shares lost 12.8 per cent to €9.02. Swissair tumbled 9.7 per cent to SFr45 (€30.50). It now estimates revenue losses of about SFr56 million over the last week. Air France was another casualty, losing 9.6 per cent to €9.58.

Aerospace and defence stock EADS, main owner of Airbus, revealed a 38 per cent rise in half-year profit and kept its target for a 10 per cent operating margin in 2004. But its results were outweighed by the rapidly deteriorating picture for orders, including Wednesday night's news that Lufthansa was postponing orders for 15 Airbus aircraft. EADS shares fell 8.4 per cent to €10.21.

Technology also saw steep falls. Philips shares dropped 4.9 per cent to €18.97, while ASML fell 8.7 per cent to €11.79 and STMicroelectronics 5.2 per cent to €21.55.