The European markets fell for the second day on Wednesday, as growing concerns about the economic crisis hit financial stocks and falling crude oil and copper prices drove commodity stocks lower.
The U.S. Treasury Department announced that it no longer plans to buy troubled mortgage-related assets from banks with the $700 billion financial relief package created last month. In a press conference, Paulson revealed that the government would now focus on building capital in financial institutions, finding ways to support consumer access to credit and looking at ways to ease mortgage foreclosures.
Meanwhile, a report today showed U.K. unemployment rose at the fastest pace in 16 years in October as the economy slid into its first recession since 1991.
The Bank of England Governor Mervyn King said the Monetary Policy Committee is certainly prepared to cut interest rates again if necessary to keep inflation at target. On November 6, the central bank had reduced the bank rate by a bigger-than-expected 1.5 percentage points to 3% in a bid to alleviate the mounting pressures on economy.
Crude for December delivery fell $2.49 to $56.85 a barrel on the New York Mercantile Exchange, by the time the European markets closed, as a Bank of England warning about the risk of deflation stoked fears of stagnating global growth.
The FTSEurofirst 300 index of pan-European blue chips closed 3.36% lower at 853.88 points, while the narrower DJ Stoxx 50 index fell 3.23% to 2,137.96 points.
Around Europe, the U.K.'s FTSE 100 index fell 1.52% to 4,182.02, while France's CAC 40 index dropped 3.07% to 3,233.96 and Germany's DAX index slipped 2.96% to 4,620.80. Swiss Life, Switzerland's biggest life insurer, tumbled 20.1% after the company said its full year profit won't meet the 1.8 billion to 1.9 billion Swiss franc target announced in August. Credit Suisse, Switzerland's second largest bank, dropped 8.8% on market talk of a large trading loss.
Dutch financial services firm ING fell 4% after posting its first quarterly loss and French bank Natixis slid 13.5% after saying its securities unit had a loss of about 250 million euros in October because of volatile markets.
Heavily weighted oil stocks lost ground after crude oil prices fell to a 20-month low. BP, Europe's biggest oil company, dropped 4.6%, while Royal/Dutch Shell, the second biggest, fell 1.5% and Total, the third biggest, slipped 2.6%.
Similarly, mining stocks slipped after copper prices slumped to a three-year low. BHP Billiton, the world's biggest miner, slid 6.9%, while Anglo American, the second biggest, dropped 8.4% and Rio Tinto, the third biggest, fell 1.8%. Copper miner Antofagasta lost 2%.
On the other hand, J Sainsbury, Britain's third largest supermarket chain, rose 2.8% after the company's first-half pretax profit before one-time items came in above analysts' expectations and the company raised its first-half dividend by 20%.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.