Eurostoxx 50: 2,153.77 (–140.47) Frankfurt DAX: 5,613.42 (–303.66) Paris CAC: 3,002.99 (–173.20)EUROPEAN STOCKS fell to a two-year low yesterday, amid specul-ation the region's debt crisis is spreading and as the Federal Reserve's plan to hold interest rates failed to ease concern that the economic recovery is stalling.
EON plummeted the most on record, dragging Germany’s DAX down the most since 2008, as the nation’s largest utility said it will reduce its workforce by more than 10 per cent and cut dividends. EON tumbled 11 per cent to €13.82.
The benchmark Stoxx Europe 600 slid 3.8 per cent in London, erasing an earlier advance of 2.2 per cent.
“I am not convinced that what the Fed said will help the market hugely in the medium-to-long term,” said Markus Huber, head of German sales trading at ETX Capital in London.
“More details would be needed on what exactly the Fed is planning to do in case growth continues to slow even more severely,” he said.
Banks retreated 6.7 per cent, the most since March 2009. Société Générale lost 15 per cent to €22.18, the biggest drop since October 2008.
BNP Paribas, France’s largest lender, sank 9.5 per cent to €35.61 and Credit Agricole plummeted 12 per cent to €6.07, a record low.
“Société Générale issued a warning recently, which makes it very vulnerable to market rumours and that’s why the stock is getting hit today,” Mr Huber said.
The French bank said on August 3rd that it may miss its 2012 earnings target after second-quarter profit fell 31 per cent because of a writedown on Greek government debt.
UniCredit, Italy’s biggest bank, fell 9.4 per cent to 96.7 cents while Intesa Sanpaolo, the second-largest bank, slumped 14 per cent to €1.13.
Kloeckner led declining shares in the Stoxx 600 after reporting second-quarter earnings before interest, taxes, depreciation, and amortization of €62 million, missing analyst estimates of €87.2 million. The stock plunged 26 per cent to €9.59.
Adecco, the world’s largest supplier of temporary workers, slumped 11 per cent to 34.5 Swiss francs.
Dragon Oil soared 5.6 per cent to 454.25p, the largest advance in a month. – (Bloomberg)
