European stocks dropped, pushing the Dow Jones Stoxx 600 Index to the lowest in more than 12 years, before a report that may show the US economy lost the most jobs since 1949 last month.
Intesa Sanpaolo SpA and UniCredit SpA tumbled at least six per cent, sending Italy's benchmark S&P/MIB Index to a record low amid concern an economic slowdown at home and in Eastern Europe will weight on earnings. Wolseley Plc sank 11 per cent after the world's biggest distributor of heating and plumbing gear announced plans to sell shares. BT Group Plc slipped six per cent as Morgan Stanley downgraded the UK's largest phone company because of the stock market impact on pensions.
European shares fell in a choppy trade. The FTSEurofirst 300 index of top European shares was down 0.5 percent at 667.70 points after falling as low as 660.90 – the lowest in its 12-year life. The index is set to decline for a fourth straight week.
Financials were the biggest decliners on the index, with BNP Paribas down 5.2 per cent, Societe Generale slipping 5.5 per cent, Credit Agricole declining 7.1 per cent and Deutsche Bank falling 1.6 per cent. Insurers were also hit hard. Friends Provident slumped 14 per cent, Aviva was down 9.2 per cent and Standard Life lost 7.2 per cent.
In spite of a broader sell-off in the market, commodity shares showed some resilience, tracking gains in crude prices and key base metals. Crude was up two per cent, copper gained 2.2 per cent and nickel was 2.8 per cent higher.
Japanese stocks retreated, extending a weekly decline, on concern a shortage of funds could spark collapses in the automotive and electronics industries. The Nikkei 225 Stock Average declined 3.5 per cent, to close at 7,173.10 in Tokyo, just over 10 points away from its lowest close since October 1982. The broader Topix index dropped 2.7 per cent, to 721.39, a level not seen since December 1983. The Nikkei lost 5.2 per cent this week, while the Topix slid 4.7 per cent.
US stock index futures searched for direction yesterday, following a major stock selloff in the previous session, as investors nervously waited for the latest number of unemployed Americans.