IRISH shares retreated yesterday in line with major stocks across Europe. By early afternoon in Dublin, the ISEQ Overall Index was down 0.78pc, or 30.05 points, to 3814.93.
The Dublin market fell on opening and struggled to recover throughout the morning. It was in keeping with the general mood across the continent as stocks in Europe declined for a fourth day in the longest losing streak in three months
In Dublin, it was a poor early half of the day for commodities and exploration firms, with Dragon Oil down 3.3pc to €6.76, Petroneft Resources slipping 2.3pc to €0.04 and Kenmare Resources falling 2.2pc to €0.31.
Building materials firm CRH was down 1.9pc to €15.52, while insulation group Kingspan fell 2.2pc to €9.14.
The airlines and banks dominated the other side of the board.
Amid word from the Department of Finance that deposits in the banks covered by the state guarantee had edged fractionally higher last month despite the Cypriot bailout, and that reliance on ECB funding had fallen by 10pc, AIB and Permanent TSB all enjoyed gains.
AIB was up 1.5pc to €0.07, while PTSB gained 0.83pc to €0.04.
Conversely, Bank of Ireland slipped 2.3pc to €0.17.
Elsewhere, it was a bleak picture on the European mainland. The Stoxx Europe 600 Index fell 1.1pc by early afternoon.
The gauge earlier slid as much as 1.4pc amid speculation that Germany's credit rating could be downgraded, before recovering some of the losses within 15 minutes.
The FTSE 100 was down 0.6pc, France's CAC 40 slid 1.6pc and Germany's DAX fell 1.7pc.
"Investors are worried that Germany's economy isn't holding up so strongly anymore, and German downgrade rumours are spreading more fear in the markets today," said John Plassard, vice-president at Mirabaud Securities in Geneva.
"Coupled with the disappointing Chinese GDP numbers from earlier this week and the plunging gold prices, we're in the middle of a phase of uncertainty and possibly a correction – the last thing market participants want to hear in such a period are downgrade rumours."
BHP Billiton retreated to a seven-month low after the world's largest mining company said third-quarter iron ore production rose less than expected.
Retail giant Tesco sank 3.3pc after reporting the first annual profit drop in almost 20 years and saying it will exit the US market.
Microelectronics company ASML Holding rose the most since July after posting first-quarter sales that topped analysts' estimates and announcing a share buyback programme.
US stocks fell in early trading, dragging the Standard & Poor's 500 Index lower after the biggest rally in three months, amid disappointing results by companies from Bank of America to Textron.
All 10 groups in the S&P 500 declined, losing at least 0.4pc. Bank of America lost 4pc after profits missed analysts' projections.
Textron slumped 13pc after lowering its forecast for business-jet sales. Caterpillar slid 2.1pc after Macquarie Group cut its rating on the shares to neutral.
The S&P 500 (SPX) declined 1.2pc to 1,555.10 in New York. The benchmark gauge surged 1.4pc on Tuesday, rebounding from a 2.3pc loss on Monday.
The Dow Jones Industrial Average lost 137.15 points, or 0.9pc, to 14,619.63. Trading in the S&P 500 was 41pc higher than the 30-day average.