Stock markets around the world were knocked lower and oil prices jumped after Saudi Arabia and its allies carried out air strikes in Yemen.
The attack triggered fears of disruption to oil supplies in the Middle East, causing the price of Brent crude to lift by nearly 6 per cent to just below $60 a barrel.
Key markets in Europe and in the US, which had already been declining on fears US economic growth may be slowing, were down 1-1.5 per cent on the day.
A vertiginous slide in oil prices, from more than $115 a barrel last June to a low of $45 in January, has been a major driver of financial markets in the past year and a key factor driving global interest rates down and stock markets up.
DUBLIN The Iseq index of shares fell 1.6 per cent to 5,994 points in line with other European bourses.
There was a weakness across the board following on from a sell-off in the US overnight, one trader said.
Airlines took a hit on the back of higher oil prices. Ryanair closed 1.6 per cent down at €10.55 while Aer Lingus fell 0.8 per cent to €2.36.
Conversely, the rise in oil lifted Dragon Oil which saw its shares 1.4 per cent to €7.97.
Iseq newcomer Malin, the biotech investment vehicle set up by ex-Elan executives, enjoyed another positive day, rising 2.6 per cent to finish at €11.05.
The company raised €330 million from international investors in its debut on Wednesday.
LONDON The FTSE 100 Index fell sharply as military action in the Middle East stoked oil prices and saw more than 1 per cent sliced off its value.
London’s top-flight index dropped 95.6 points to 6895.3 as Gulf tensions led to a widespread sell-off dragging all but a handful of stocks down as the buoyant mood that had seen it surge above the 7,000 landmark last week evaporated.
In London, a number of travel and leisure stocks were also on the back foot due to the reversal in the recent trend towards lower fuel costs.
They included low-cost airline easyJet, which dropped almost 3 per cent, or 53p to 1837p, despite a positive trading update from the low-cost carrier.
The airline said it expects an improved pre-tax profit performance in its usually weaker first half due to rising demand and favourable currency movements.
Shares in British Airways owner International Airlines Group also fell 3 per cent – off 20.5p to 587p – and cruise ship operator Carnival dipped 21p to 3024p.
London Stock Exchange Group led the fallers after Borse Dubai sold its entire 17 per cent stake in the business, ending a relationship dating back to 2007. Shares dropped nearly 6 per cent, or 143p, to 2395p.
EUROPE European stocks fell day, extending the previous session's retreat, hurt by worries over valuation levels in growth sectors such as technology following strong gains this year.
Euro zone equity indexes managed to trim heavy losses in late trade, however, as the euro currency reversed gains and slipped again.
Shares in Nokia, Alcatel-Lucent, STMicroelectronics, ARM, and ASML lost 1.9 per cent to 4.9 per cent.
European tech firms, seen as benefitting significantly from the drop in the euro over the past year, had surged 42 per cent since mid-October, outpacing the overall market and sending the sector to valuation ratios well above long-term averages.
NEW YORK US stocks fell for a fourth day in their longest slide since January, as declines in transportation shares overshadowed a rebound in technology companies. Treasuries tumbled amid weak auction demand, while oil advanced as Saudi Arabia bombed Yemen. The Standard and Poor's 500 Index slipped 0.2 per cent in New York.
