International financial markets are heading into a period of fresh uncertainty after share prices suffered further heavy falls. There is growing concern that financial pressures in Russia and Asia are spreading to other markets and threatening to slow international economic growth.
Billions of pounds were wiped off the value of world shares yesterday as volatility on Wall Street continued. European markets dropped and new worries emerged about problems in some Latin American economies.
Shares in Dublin suffered heavily, with the ISEQ index falling by over 2.8 per cent, knocking almost £1.3 billion off the value of Irish share prices. Financial shares were the worst affected, falling by 3 per cent on average, with Bank of Ireland down 50p and AIB losing 32p.
For a time late yesterday a sharp fall on Wall Street looked set to threaten fresh instability next week. The Dow Jones average of US shares was down almost 3 per cent at one stage, before staging a late recovery to close down just 0.9 per cent.
Predictions that the Russian crisis could deepen and the US missile attacks in Afghanistan and Sudan increased nervousness among investors.
The German equity market was the hardest hit in Europe because of the country's proximity to Russia. The Dax index of German shares dropped almost 6 per cent.
In London, Europe's biggest stock market, the FTSE 100 fell 3.4 per cent, and the Paris share index dropped by 3.5 per cent.
Investors' nerves will be tested further next week as Russia outlines its debt-restructuring plans.
Meanwhile, heavy pressures are building on a large number of smaller financial markets in central and eastern Europe and Latin America, where currencies are under pressure to devalue.
Venezuela, a speculators' target, said it would allow its currency to fluctuate more freely in its predetermined range.