* FTSEurofirst 300 down 1.9 pct, hits 3-week low
* Euro STOXX 50 turns negative on the year, breaks key
* Argentina in spotlight after peso plummets
* Spanish stocks with significant exposure to Latam hammered
* Record weekly inflows from U.S. investors -Lipper
By Blaise Robinson
PARIS, Jan 24 European stocks suffered their
biggest one-day slide in seven months on Friday, as concerns
about economies and currencies in Latin America triggered profit
taking after a recent sharp rally.
Spanish stocks were among the worst hit, with Madrid's IBEX
benchmark dropping 3.3 percent, led by Telefonica
down 5 percent, and lenders BBVA, down 5.6
percent, and Banco Santander, down 2.5 percent.
The three Spanish companies derive about half of their
revenues from Latin America - the biggest exposure to the region
among European blue-chips, according to data from MSCI.
French groups Edenred and Casino, which
also have massive exposure to Latin America, were down about 4
"The sell-off has been sparked by mounting worries over
emerging markets, with Argentina in the spotlight today," FXCM
analyst Vincent Ganne said.
"Investors are getting nervous about a potentially excessive
exposure to equities, and have decided to trim their positions,
turning to bonds and gold instead."
Argentina's government decided on Friday to loosen foreign
exchange controls, a day after the country's peso suffered its
steepest daily decline in 12 years.
At 1525 GMT, the FTSEurofirst 300 index of top
European shares was down 1.9 percent at 1,306.96 points, hitting
a level not seen in three weeks and suffering its biggest
pull-back since June.
The euro zone's blue-chip Euro STOXX 50 index
was down 2.5 percent, turning negative on the year and breaking
below its 50-day moving average, sending a negative technical
Earlier this week, charts sent a series of bearish signals,
flagging up 'overbought' conditions and strong resistance
levels, raising the risk of a correction following lofty gains.
"The drop in the IBEX today is essentially an excuse, it
doesn't have much to do with Latin America," said Margarita
Rivas, sales trader at GVC Gaesco Valores, in Madrid.
"Charts were showing exhaustion and the need for a
correction. There's further room on the downside, to around
9,200 points for the IBEX, without reversing the positive
medium- to long-term trend."
Despite this week's sell-off, investor appetite for European
stocks has remained strong, with weekly investment inflows from
U.S. investors hitting a record high in the seven-day period
ended Jan. 22.
The Lipper poll of a hundred U.S.-based funds invested in
European equities, which include exchange-traded fund (ETFs)
holdings, shows the funds poured $1.27 billion into European
equities during the seven-day period, the biggest weekly net
inflows since Lipper started to monitor the funds in 1992.