LONDON, June 20 European shares posted their
steepest one-day fall in 19 months on Thursday, hit by the
prospect of reduced U.S. monetary stimulus and fresh signs of
sluggish Chinese economic growth.
The pan-European FTSEurofirst 300 index fell 2.9
percent to 1,146.22 points after the Federal Reserve said late
on Wednesday stronger U.S. growth meant it would be likely to
reduce its hefty asset purchases this year.
The Fed's quantitative easing programme (QE), along with
similar moves from global central banks, have helped drive a 20
percent European equity rally in the past year in spite of a
shrinking domestic economy and falling earnings expectations.
"The market has had its safety blanket taken away," Chris
Wyllie, chief investment officer at wealth manager Iveagh, said.
Shares in financial services firms and banks
, which are highly sensitive to trends in global markets
and have been among top gainers in the past year, shed 3.6-3.7
percent as global bonds and shares fell.
Mining, auto and consumer goods stocks
ended down between 3.5 percent and 4.2 percent as data
showed factory activity in China, the world's top consumer of
metals and a key client of European exporters of consumer goods,
pointed to a sharper second quarter slowdown.