European shares hit a six-year closing low on Friday, with investors dumping equities to grab assets such as bonds and gold as deepening economic downturn hit market sentiment and raised fears of bank nationalisations, according to Reuters. Safe-haven buying lifted U.S. gold futures to a seven-month high above a key psychological level of $1,000 an ounce, while Euro zone government bonds rose after record low readings of euro zone purchasing managers' indexes. Banking stocks suffered the most, with Credit Agricole slipping 9 percent, Royal Bank of Scotland down 11.5 percent, UBS dropping 14 percent, Dexia down 8.4 percent and Commerzbank declining 8.6 percent. The FTSEurofirst 300 index of top European shares provisionally closed 3.3 percent down at 738.57 points after hitting a low of 736.27 points -- its lowest since March 2003. The benchmark index declined 7.3 percent this week to fall for the second week in a row. It is down more than 11 percent so far this year after tumbling 45 percent in 2008 on a credit crisis -- the worst since the Great Depression of the 1930s. "When you look at historically poor data, see companies reporting results considerably below market expectations and when management teams offer a negative outlook for the rest of the year, there is no surprise that market confidence continues to take a battering," said Henk Potts, strategist at Barclays Stockbrokers. "Certainly in the first quarter, we anticipate the market to continue to be very volatile. We are suggesting that the best strategy is to remain defensive and pick the stocks that have reliable earnings stream."
