IRISH shares endured their worst one-day fall since November as gloomy reports in the European economy dampened sentiment and concern mounted that the US Federal Reserve will scale back its asset-purchase programme.
The ISEQ slipped 56.79 points, or 1.5pc, to 3623.27 points as heavyweights such as CRH fell heavily. The building materials company slid 4.2pc to €15.41 as rival Saint Gobain disappointed markets.
Other shares to see falls included Petroneft, which fell 13pc to 5 cents; Permanent TSB, which closed down 8.6pc at 3 cents following Moody's downgrade of the company's bonds; and Independent News & Media, which declined 8.5pc to 3 cents.
Food companies bucked the trend, with Kerry advancing 0.6pc to €41 and Glanbia edging up 0.3pc to €8.40. Origin rose 0.2pc to €4.85.
European stocks also had a torrid time, declining the most in more than two weeks.
National benchmark indexes fell in every western European market except Iceland. All 19 industry groups in the Stoxx Europe 600 Index retreated, with a gauge of carmakers dropping 2.5pc.
BHP Billiton, the world's biggest mining company, posted its largest two-day drop in more than nine months.
The minutes of the Federal Open Market Committee's meeting showed that Fed officials debated whether monetary easing risks exacerbating inflation or fuelling asset-price bubbles.
Several participants at the meeting "emphasised that the committee should be prepared to vary the pace of asset purchases", according to minutes released after the close of European markets yesterday.
"The minutes of the Fed meeting further expose the policy rifts within the FOMC and presage a gradual scaling-back of the Fed's asset-purchase programme," said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London.
Euro-area services and manufacturing shrank in February more than economists had forecast. A composite index of both industries in the 17-nation currency bloc fell to 47.3 from 48.6 in January, London-based Markit Economics said.
Economists had predicted a reading of 49, according to the median of 22 estimates in a Bloomberg News survey. A reading below 50 means that activity contracted.
Axa retreated 3.1pc to €13.27 as net income unexpectedly fell to €4.15bn in 2012 from €4.19bn in 2011.
Swiss Re gained 2.5pc to hit its highest price since June 2008. Investors will receive a special dividend of four francs a share, plus an ordinary dividend of 3.50 francs, the insurer said.
BAE Systems jumped 4.1pc, its biggest rally in more than five months.