Stock markets tumbled in the afternoon as Wall Street moved sharply lower on renewed fears about inflationary pressures in the US economy.
The Eurobloc 100 index of leading shares in the euro zone fell 27.56 or 2.6 per cent to 1,031.09, while the Eurotop 100 index dropped 75.88 or 2.6 per cent to 2,861.46. The more broadly-based Eurotop 300 index closed 30.95 or 2.4 per cent lower at 1,249.37.
Frankfurt tumbled 3.4 per cent as a sharp fall by DaimlerChrysler added to the market's already steep correction. The Xetra Dax index lost 177.24 to 5,052.32, extending its pullback from the year's high on July 12th to more than 11 per cent,
DaimlerChrysler fell €6, or 7.5 per cent, to €74 after the carmaker's 6.6 per cent rise in second-quarter profits failed to live up to expectations. BMW, a rare gainer in the Dax, put on €12.50 to €702 as Lehman Brothers lifted its price target to 1,000.
Paris fell almost 3 per cent as technology stocks led the market lower. The CAC-40 index, which climbed in early trading, ended 122.3 or 2.8 per cent lower at 4,306.40. Equant, the networking group, was the biggest faller on the CAC, declining €10.35, or 11.5 per cent, to €79.65 after it revealed that it fell into operating loss in the first half.
Zurich turned back as interest rate worries hit financials. The SMI index lost 115.6 to 6,713.6. UBS fell SFr14 to SFr435 (€272.4) and CS lost SFr7.50 to SFr272.50 (€170.64). News that CS Group's Japanese derivatives unit was being banned from doing business in the country was expected to have marginal impact.
Milan closed 2.2 per cent lower, with the Mibtel index ending trading at 22,745 on the back of renewed concerns about rate increases. Utility AEM, the most actively traded share, closed 4.6 per cent higher at €2.01 after unveiling a telecoms deal and posting a 12.8 per cent rise in first-half gross operating margin.
Amsterdam dropped nearly 2 per cent, spiralling downwards in afternoon trading after the stronger than expected US employment costs data. The AEX index slipped 10.12, or 1.82 per cent, at 546.06.
