Irish share prices, which have fallen 7 per cent since they reached their all-time high two weeks ago, may face further selling today after Wall Street closed down over 90 points, a fall of over 1 per cent. At one stage, the index had fallen over 200 points but bounced off the day's low as blue-chip shares regained some ground.

One of the main factors behind yesterday's slump on Wall street was the White House sex scandal, which saw the Dow plunge following news that Monica Lewinsky had struck a deal for immunity against prosecution. "Anything that undermines the president's effectiveness is not good for our financial markets. These kind of matters can take down the dollar, and with it bonds and cash," said one Wall Street strategist.

Analysts pointed to developments in Washington after reports that the former White House intern may be willing to testify she had sexual relations with President Clinton, but that he never pressured her to lie about it.

The political situation was just one of the factors that drove Wall Street to its lowest level for a month, with earnings disappointments and the recent cautionary words from Federal reserve chairman Mr Alan Greenspan also hitting sentiment. Others cited concerns that a new government in Japan would not enact drastic reforms needed to address the economic crisis.