European shares fell sharply this morning as soaring oil prices threatened to bite into company profits.
By 10.45am the Dublin market had fallen by 2.7 per cent with the main financials bearing the brunt. Bank of Ireland shares were down 2.83 at €9.06, AIB was off 2.6 per cent at €13.26 while shares in Anglo Irish were off 4 per cent at €8.43.
Data showing the US economy is on the brink of recession put additional pressure on financials, which are grappling with billions of dollars of write-downs related to a crisis in the US subprime mortgage market.
Europe's third-biggest bank, UniCredit, fell 5 per cent after posting slightly lower-than-expected 2007 profits. It said its exposure to US subprime was a "negligible" €164 million in December.
UBS was down 4.7 per cent, Barclays fell 3.6 per cent, and Commerzbank was down 5.3 per cent.
At 9.42am the FTSEurofirst 300 index was down 1.8 per cent at 1,261.13, having rallied for two days running after a central bank move on Tuesday to add billions of dollars of liquidity to struggling credit markets.
Setting the tone, US stocks fell overnight, and Japan followed suit as a new record on oil prices, above $110 a barrel, raised fears of further strains on corporate profits.
The strength of the oil price also put pressure on airlines, with Ryanair, British Airways and Air France-KLM down between 3.9 per cent and 6.2 per cent.