On Tuesday European stocks fell, extending a global selloff, as concern escalated that the region’s debt crisis will spread and North Korea fired artillery shells into South Korea. U.S. futures and Asian equities also retreated.

Bank of Ireland Plc led banks lower, plunging 21 percent as Irish Prime Minister Brian Cowen said he will seek national elections early next year. BHP Billiton Ltd. and Rio Tinto Group both fell with base metal prices, while Sky Deutschland AG sank 7.1 percent after the nation’s regulator found mistakes in the company’s financial statements.

The FTSEurofirst 300 index of top European shares fell for a third straight session and was down 0.5 percent at 1,088.26 points during morning trading. The benchmark index is up just 4 percent this year after rising 26 percent in 2009.

Miners featured among the top losers, tracking a sharp decline in metals prices on tensions in the Korean peninsula. Seoul's military and media reports said artillery shelling by North Korea at the South Korean island set buildings on fire and prompted a return of fire by the South. A witness said that residents of the island had been evacuated.

Financial stocks fell as investors stayed concerned about the situation in Ireland, which began two weeks of political maneuvering as the government dares the opposition to block an austerity budget on which a multi-billion euro EU/IMF bailout is riding.

The markets are not convinced that aid to Ireland would prevent some other heavily indebted EU members from seeking help. Irish Prime Minister Brian Cowen defied mounting pressure to quit, saying he would stay in office until parliament passed the budget, then call an early election.

Asian stocks traded lower, as investors feared Ireland's debt crisis could spread, raising the specter of losses by exposed U.S. banks.