European and Asian financial watchdogs were yesterday investigating whether organisers of last week's US attacks had sought to profit from the carnage by selling shares beforehand. Watchdogs in Britain, Germany, Switzerland and Japan have all said, or strongly indicated, they are studying trading patterns for any sign that an insider had taken a grisly bet that the attacks would send shares tumbling. In the financial mayhem that followed the attacks in the United States, offshore stocks fell heavily, with aviation and insurance shares worst hit.

In Europe, speculation of short selling by people with prior knowledge of the attacks has centred on Munich Re, one of the world's biggest reinsurers. The attacks triggered a fall of around 15 per cent in Munich Re shares.

London's Financial Services Authority said it was routine for it to look at trading patterns before and after a major market-moving event for signs of foul play.