Further sharp declines in global stock markets wiped another €1.5 billion from the value of Irish shares yesterday, bringing the losses so far this week to more than €7 billion in Ireland alone, writes Claire Shoesmith.
The market fell 1.5 per cent, closing at a level last seen at the end of January and down 7 per cent on the record level it hit on February 20th.
World markets are still coming to terms with the uncertainty prompted by a sudden 9 per cent drop in Chinese markets on Monday night. Since then, European markets have endured three straight days of declines, while the US ended the day marginally higher on Wednesday and put in a volatile performance yesterday.
Irish stockbrokers were quick to point out that sentiment towards the market here remains strong, but said the next step was difficult to predict as it is taking its lead from overseas markets.
"Everything is just getting a hammering," said one Dublin trader. "There are few exceptions."
Analysts are reluctant to call an end to what many believe was an expected reversal - or correction - in the markets after several of the world's main indices hit record highs last month.
US consumer sentiment figures due out today will be watched anxiously, as poor figures could trigger further selling, dealers said.
Ronan Carr, European equity strategist at Morgan Stanley in London, said: "People initially thought we were only going to see a small pull-back in equity markets, with no major correction. But it seems they are starting to doubt that."
Albert Edwards, global strategist at Dresdner Kleinwort, said: "We believe the long- and widely-awaited equity correction is upon us."
The recent declines spell bad news for the nation's SSIA holders. A report by Hewitt Associates yesterday indicated some individuals with equity-based funds yet to mature may see the value of their funds fall by as much as €1,800 if the markets remain volatile.
Concerns about global economic growth and the outlook for corporate profits have been plaguing investors since the start of the week, when talk of a possible change to Chinese tax rules caused markets to plummet.
In London, the FTSE 100 ended the day almost 1 per cent lower, with the story similar in mainland Europe, where the FTSE Eurofirst 300 closed 0.8 per cent lower.