European equities hit fresh four-year lows by midday led down by insurers, oils and drugs as the dollar fell further below parity with the euro.
At noon, the FTSE Eurotop 300 index of pan-European blue chips was 1.85 per cent lower at 920.5 points. Yesterday, Europe's stock markets slumped over 5 per cent to their lowest levels since 1998 leaving confidence in tatters.
In Dublin the ISEQ followed the downward trend with selling seen across the board. At 12.30 p.m. the Irish index stood at 4,284.20 down 59 points on the day.
Investors' nerves are fraught by a combination of scepticism over US corporate integrity, doubts over second-quarter earnings and a weak dollar, which has fallen to parity with the euro for the first time in 27 months.
Strategists are still holding fire before calling this latest downturn a capitulation by investors.
Drug company GlaxoSmithKline led Europe's blue-chip decliners, tumbling 6.7 per cent following news that a generic version of its top-selling drug Augmentin had been launched in the US, earlier than some analysts expected.
Insurers were pummelled on continuing fears that their capital base is being eroded by tumbling stock prices and will have to top-up reserves by reducing their equity holding.
Swiss Re and France's Axa led a decline in insurance stocks with falls of 4.6 per cent and 5.9 per cent respectively.
But Deutsche Telekom was up 4.9 per cent ahead of a decision on whether Mr Ron Sommer will stay on as its chief executive.
Later in the session, sentiment in Europe is likely to be driven by corporate earnings announcements from US companies including General Motors and Merrill Lynch, and by a monetary policy speech from Federal Reserve chairman Mr Alan Greenspan.