LONDON May 23 A benchmark European equity index
had its worst one-day fall in nearly a year on Thursday, hit by
worries over a possible end to U.S. economic stimulus measures,
with mining and auto stocks among the worst performers.
The pan-European FTSEurofirst 300 index
provisionally closed down 2 percent at 1,231.13 points, marking
its biggest one-day fall since a 2.4 percent drop on July 23,
The euro zone's blue-chip Euro STOXX 50 index
also declined 2.1 percent to 2,776.40 points.
World stock markets, which have rallied this year on the
back of liquidity injections and interest rate cuts by central
banks, fell after U.S. Federal Reserve head Ben Bernanke said
the Fed could scale back stimulus measures at one of its next
Mike Turner, European equity options broker at XBZ Ltd, said
investors had bought "put" options betting on a future fall on
the Euro STOXX 50 that were due to expire in July with a strike
price of 2,400 points - implying a potential fall of more than
13 percent on that index over the next two months.
Peter Rice, head of investment strategy at Logic
Investments, also felt the sell-off could deepen and advised
investors looking to buy Germany's DAX to wait for
another 3-4 percent fall before buying back into that index.
"I think this broad-based sell-off could be a little bit
more protracted," he said.