Stocks plummet with top banks the main losers

Eurostoxx 50: 2,220.72 (–85.03) Frankfurt DAX: 5,538.33 (–209.72) Paris CAC: 3,148.53 (–117.30):EUROPEAN STOCKS plunged, paring the biggest weekly rally since July, as a report showing no growth in US jobs spurred concern that the world's largest economy will not help offset weakness caused by the sovereign-debt crisis.

The Stoxx 600 sank 2.4 per cent to 233.11 in London.

“For the stock markets, this highlights the high uncertainty we’re facing,” said Espen Furnes, an Oslo-based fund manager at Storebrand Asset Management. “The economic recovery in the US is still weak and vulnerable,” he said.

European sovereign default risk rose to a record with the Markit iTraxx SovX Western Europe Index of credit-default swaps insuring the debt of 15 governments rising 11 basis points to 310, surpassing an all-time high closing price of 308 on August 26th.

The Stoxx 600 declined 10 per cent in August, its largest monthly retreat since October 2008, amid concern global economic growth is slowing as Europe’s sovereign-debt crisis spread.

Barclays slumped 8.4 per cent to 165.2p, halting a three-day rally, while Credit Agricole lost 7.4 per cent to €6.19.

Lloyds Banking slid 7.1 per cent to 33.12p, and Royal Bank of Scotland dropped 5.4 per cent to 24.84p.

Deutsche Bank, Germany’s largest lender, tumbled 5.9 per cent to €26.02.

AstraZeneca lost 3.7 per cent to 2,809.5p after the London-based company said Crestor showed a benefit over Pfizer’s Lipitor in a study, though by one measure the result was not statistically significant.

Peugeot lost 6 per cent to €19.86.

Saint-Gobain, Europe’s biggest supplier of building materials, retreated 6 per cent to €32.96.

Straumann Holding dropped 5.6 per cent to 144.50 Swiss francs after Goldman Sachs downgraded the shares to “sell” from “buy”.

Bilfinger Berger declined 4.1 per cent to €56.56 following a report that the company might spend €1 billion on acquisitions over the next two years.

The Financial Times Deutschland cited chief executive officer Roland Koch as saying Bilfinger seeks opportunities for its building-services business in Italy and the UK. – (Bloomberg)