European stocks fell Wednesday following steep slides in Asian shares, both on growing speculation the U.S. economy _ a vital export market _ could slide into a recession, reported The Associated Press. The pan-European Dow Jones Stoxx 600 index was down 1.3 percent to 331.5, its lowest level since September 2006, on U.S. fears and with technology stocks among the worst hit led by Dutch chip equipment maker ASML, whose shares fell 11 percent. The company announced sales and profits that exceeded analysts' expectations, but it failed to give a forecast for its first quarter owners. The German DAX 30 index fell 1.1 percent to 7,482.44, the French CAC-40 index declined 0.8 percent to 5,208.4 and Britain's FTSE 100 index fell below the 6,000 mark for the first time since August. The index was down 1.1 percent to 5,957.60. Investors in Europe and Asia dumped stocks after an overnight sell-off on Wall Street and on news that Citigroup Inc. had lost nearly US$10 billion (¤6.7 billion) in the fourth quarter as it wrote down mountains of bad mortgage assets _ the latest fallout from the credit crisis. Weak U.S. retail sales figures added to the gloom. «People are now fully aware that the credit crisis in the U.S. could be a threat to growth on a global scale,» Heino Ruland at consultancy FrankfurtFinanz said. Investors in the microchip sector were also eyeing the latest news from U.S. chip maker Intel, after the company reported a 51 percent jump in net profit but missed market expectations and also provided a gloomy forecast for the first quarter. Shares in German chip maker Infineon Technologies fell 3 percent, while its Franco-Italian competitor STMicroelectronics fell 2.6 percent. Shares in mining and oil companies fell as commodity prices weakened. Mining company Lonmin's shares were down 3.3 percent and French oil company Total's shares were down 1.7 percent. Banks, which triggered the sell off last summer, were also hit, with shares in UBS down 4.3 percent and Credit Suisse shares down 5.9 percent. Earlier in Hong Kong, the benchmark Hang Seng index sank 5.4 percent _ its biggest percentage drop since the Sept. 11, 2001, terrorist attacks _ to 24,450.85. Tokyo's Nikkei 225 index fell 3.4 percent to 13,504.51 points, its lowest in more than two years. Markets in Australia, China, India, South Korea, New Zealand and the Philippines also dropped sharply on uncertainty about the U.S. economic outlook and the full extent of the subprime mortgage crisis. Concerns about the U.S. financial system were also felt in the currency market, which sent the U.S. dollar below 106 yen, its lowest in 2½ years. Investors saw more damage from the credit crisis when Citigroup said Tuesday it had written down US$18.1 billion in bad assets. That help send the Dow Jones industrial average down 277 points, or 2.2 percent, to 12,501.11. «The fallout from the Citigroup result is significant, with many saying ... there is more bad news to come,» said Trent Muller, an ABN Amro Morgans analyst in Sydney. «We will see a bit of panic selling with a lot of investors taking cash off the table today.» There is also growing fear that the Federal Reserve hasn't done enough to keep the U.S. economy going. The central bank has lowered its key interest rate by a full percentage point to 4.25 percent since early August. Now many investors and analysts believe the Fed will cut rates by a half-point at its Jan. 29-30 meeting. In China, the benchmark Shanghai Composite Index fell 2.8 percent to 5,290.60. The index has gained 0.6 percent since the beginning of the year, compared with losses in nearly all other Asian markets.
