After a torrid day on Monday, when €4 billion was wiped off the Irish market, the Iseq fell again in early trading, giving up 1.1 per cent or 63 points, by 9.30 Tuesday morning amid global growth concerns.

Across the water in the UK, a fall in the shares of major banks and mining stocks kept Britain's top share index near three-year lows, as concerns lingered over the global economy and the health of the financial sector. The blue-chip FTSE 100 index, which fell 2.7 per cent on Monday, recovered slightly to rise 0.3 per cent but the index remained close to its lowest level in around three years. Shares in Sainsbury rose 1.8 percent after the supermarket group posted higher sales, according to data from Kantar Worldpanel.

However, a drop in heavyweight banking stocks such as Barclays and HSBC curbed the FTSE's recovery. Mining stocks also fell sharply, with Anglo American down 4.7 per cent after Anglo American's Kumba division posted lower profits. Signs of a global economic slowdown have hit world stock markets since the start of 2016, and raised concerns about the stability of the European banking system. "There are worries about global growth, and fears of a recession are starting to emerge. The banks are getting hit hard," said Richard Griffiths, associate director at Berkeley Futures. Goldman Sachs analysts wrote that while there were no signs of any strain in terms of euro or US dollar funding in money markets for European banks, market liquidity had nevertheless reduced.

Exane BNP Paribas also cut its price targets on Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered, citing the pressures on the sector. The FTSE 100 hit a record high of 7,122.74 points in April 2015 but has steadily lost ground since then. The index is down 20 per cent from that record level and down nearly 10 per cent since the start of 2016.

(Additional reporting Reuters)