There was no let-up for European shares this week as fears grew that the continent would not escape the impact of a US recession.
Banking and consumer-driven stocks bore the brunt of the sell-off. The FTSE Eurofirst dropped 4.8 per cent over week, extending its losses to 8.8 per cent since the start of the year. It ended the week at 1,358.51, off 1.2 per cent on the day.
“There is a bear market inside the index,” analysts at Citi wrote in a note. “Those stocks exposed to leverage and greatest earnings risk have been savagely de-rated.”
The market recoiled further from financial stocks in a week punctuated by big subprime-related writedowns from several American banks, and a smaller one from German bank