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European stocks sink despite G20 summit

Text by REUTERS

Latest update : 2008-11-17

The weekend's G20 summit did not manage to drive European stock market confidence back up, with most indexes closing down more than 3% as Citigroup announced a massive 50,000 jobs cut.

European shares declined on Monday as mounting concerns about a global recession and Citigroup's plan to slash about 50,000 jobs hurt bank stocks, while miners tracked weaker metals prices.

The pan-European FTSEurofirst 300 index provisionally ended 2.8 percent lower at 835.93 points. The benchmark has lost more than 44 percent this year, hit by a credit crisis.

Banking shares were one of the biggest losers on the index, with HBOS falling 13.9 percent, Royal Bank of Scotland slipping 10.4 percent and Dexia shedding 13.6 percent.

"It's very difficult for the market to rally in the face of a big deceleration in earnings and GDP estimates," said Andrew Bell, head of research at Rensburg Sheppards.

"The markets can't yet see a bottom for earnings estimates or for the economy and therefore it's either going to thrash about in a rather nervous trading range or it is going to find new lows," he added.

Market sentiment worsened after reports that Japan, the world's second-largest economy, became the latest victim of a recession and France was closing behind.

The euro zone is also in formal recession, with two consecutive quarters of contraction, Britain and the United States are on the brink and China is slowing sharply.

Miners fell on weaker metals prices. BHP Billiton, Anglo American, Vedanta Resources, Lonmin, Kazakhmys, Xstrata, Antofagasta and Rio Tinto fell 3.7 and 11.9 percent.

Across Europe, Britain's FTSE 100 fell 2.7 percent, Germany's DAX lost 3.3 percent and France's CAC fell 3.4 percent.

Date created : 2008-11-17

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