On Friday European stocks and U.S. index futures dropped as tensions between North and South Korea escalated and concern continued about Europe’s debt crisis and monetary policy tightening in China. Asian shares fell.

Banco Santander SA slumped 3.7 percent, pacing a selloff in Spanish lenders. Rio Tinto Group fell 2.9 percent, leading basic-resource stocks lower. Actelion Ltd. lost 2.4 percent as UBS AG downgraded the Swiss drugmaker’s shares. Givaudan SA, Luxottica Group SpA and Puma AG each slid more than 1 percent as Morgan Stanley recommended that investors reduce their holdings of the three stocks. Miners fell on weaker metals prices, with worries that China will move to rein in lending in its fight against inflation. BHP Billiton and Rio Tinto shares fell.

The FTSEurofirst 300 index of top European shares was down, after rising 0.5 percent in the previous session. A majority of the 16 euro zone nations and the European Central Bank are urging Portugal to apply for a financial bailout from a European rescue fund, Financial Times Deutschland said.

Nouriel Roubini, the New York University professor who predicted the global financial crisis, sees a 35 percent probability that Greece will leave the euro, with the likelihood increasing over the next five years, Austria’s Format magazine reported, citing an interview.

A gauge of bank stocks declined 2.4 percent, among the worst performance among 19 industry groups in the Stoxx 600. Banco Bilbao Vizcaya Argentaria SA lost 3.6 percent to 7.47 euros. BNP Paribas SA, France’s biggest bank, slid 3.8 percent to 47.91 euros, extending the longest falling streak in almost two months. Bank of Ireland, Ireland’s largest bank, slid 2.3 percent, extending its weekly decline to 48 percent, the biggest since January 2009.

Asian stocks fell, driving the region’s benchmark index toward its biggest loss in two weeks, as North Korea’s state news agency warned its confrontation with South Korea could lead to war, and on concern that China will tighten monetary policy.