French shares fall sharply in roller-coaster session

The day after Wall Street posted its worst loss since 2001, French shares were sharply down on Tuesday, with banks again pointing the way.

After a roller-coaster session that saw the Paris Bourse's benchmark CAC 40 flirting with a gain early in the day, shares plummeted by 2.85 per cent in mid-afternoon trading, to 4,049.96.

Belgian bank Dexia, which said Monday it owned 500 million euros (709 million dollars) in unsecured bonds of the bankrupt US investment bank Lehman Brothers, led losers, falling by 13.30 per cent.

French bank Credit Agricole lost 9.73 per cent while Societe Generale and BNP Paribas were down 7.18 and 6.5 per cent, respectively.

Early in the seesion, shares were buoyed by several factors, including the injection of 70 billion euros by the European Central Bank into the eurozone money market.

But the report that profits at the US investment bank Goldman Sachs had fallen by some 70 per cent in the quarter and uncertainty surrounding US insurance giant AIG after its ratings downgrade soured the mood, provoking a sell-off.