European shares fell in morning trade today, as economic concerns remained firmly centre stage after Barack Obama's US election victory, and investors awaited rate cuts from the region's top central banks.
At 10.18am, the FTSEurofirst 300 index of leading European shares was down 4.2 per cent at 913.31 points. In Dublin the Iseq index WAS 2.5 per cent lower at 10.20am with Bank of Ireland off over 8 per cent and AIB down more than 5 per cent.
In London the FTSE 100 was off over 4 per cent, the Paris CAC was down by a similar percentage and Germanys DAX was 4.6 per cent lower.
Banks took most points off the FTSEurofirst 300 index. BNP Paribas, Commerzbank, Deutsche Bank and HSBC were 5.6-7.7 per cent lower.
The index fell 2.2 per cent yesterday, following six consecutive days of gains, and has lost more than 38 per cent this year, hurt by the global credit crisis and resulting economic slowdown.
Bigger-than-expected job losses in the US, a sharp contraction in services sectors, steep house price declines and a manufacturing retreat in Britain all underscored the global economic gloom.
Investors are awaiting interest rate verdicts from the European Central Bank at 12.45pm and the Bank of England at noon.
All 81 economists polled by Reuters last week expect the ECB to cut rates by 50 basis points to a two-year low of 3.25 per cent and some in the market expect more.
And 10 out of 62 analyst polled then predicted the BoE would lop a full percentage point off the current 4.5 per cent benchmark interest rate. More have joined their ranks since, and all said a half point cut was a done deal.
"We're back to the grim reality of economic data showing recessionary conditions, and lower earnings guidance," said Bernard McAlinden, investment strategist at NCB Stockbrokers.
"The counterbalance is interest rate cuts. We're no longer in a situation where big cuts would cause panic," he said. "At least, it seems we've been spared stagflation. The threat of inflation has largely gone away."
Hedge fund specialist Man Group tumbled 25.6 per cent after disappointing first-half results. The global financial crisis hit the results of several leading European banks and insurers.