European markets close at lowest point in 5 years

Europe's main indexes ended a volatile trading week by closing at their lowest level since mid-2003, with bank shares leading the slide.


LONDON - European shares fell to their lowest close since mid-2003 on Friday, with investors rattled by official data that showed that Europe's economy was plunging into a recession.

The FTSEurofirst 300 index of top European shares fell 5.4 percent to close unofficially at 825.32 points, its lowest close since May 2003, and having sunk as low as 787.29 earlier in the session.

The index lost 7.8 percent over the week, and has lost 22.4 percent in October.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 fell between 3.8 and 5.6 percent.
"I sense we've moved beyond the credit crisis. There's a recognition of the damage inflicted on the global economy, that is the recession, by the credit crisis," said Mike Lenhoff, strategist at Brewin Dolphin.

"It's not just limited to the developed world. You can run but you can't hide anywhere."

Banks took the most points off the index. HSBC slumped 17.7 percent, hit by growing fears of a slowdown in emerging markets.

HSBC's fall was prompted by a Morgan Stanley price target cut to 580 pence from 630 pence and forecasting a 50 percent dividend cut for 2009.

Standard Chartered, also exposed to emerging markets, fell 15.8 percent. HBOS fell 17.7 percent.
France's Societe Generale dropped 7.6 percent. Seven French banks have requested a total of 5 billion euros in loans from a state refinancing vehicle.

Energy groups were being hammered as crude fell more than 7 percent to just over $63 a barrel, before recovering to $64.90, as the perceived effects of a prolonged recession more than outweighed OPEC's announcement that it will cut production by 1.5 million barrels a day from November 1.
BG Group, BP, Royal Dutch Shell and Total were down between 3.6 and 7.3 percent.

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