European stocks join global sell-off

LONDON (AFP) – European shares tumbled on Wednesday after sharp losses in Asia and a poor Wall Street performance amid renewed concern about the pace of US economic recovery, analysts said.

In late morning European trade, London's FTSE 100 index of top shares sank 1.76 percent to 5,109.19 points.

Frankfurt's DAX 30 shed 1.59 percent to 5,545.36 points and the Paris CAC 40 lost 1.66 percent to 3,681.68 points near the half-way mark.

The DJ Euro Stoxx 50 index of top eurozone shares plunged 1.54 percent to 2,791.45 points.

In foreign exchange trade, the euro fell below 1.48 dollars and the yen gained ground as fresh worries over the outlook for the global economy prompted buying of so-called "safe-haven" currencies, dealers said.

Financial markets were spooked US consumer confidence fell sharply in October amid growing worries about rising unemployment in the recession-wracked economy.

"The undoubted culprit is the drift in US consumer confidence in the United States on Tuesday," said MF Global analyst Manus Cranny.

"The reality is we still have a hangover and that just adds to a lack of conviction as we wait for third-quarter US GDP (data on Thursday) and nervousness about non-farm payrolls next week."

Investors also awaited fresh US data due out later Wednesday, including durable goods orders and new home sales.

The Conference Board's consumer confidence index declined for the second month in a row, to 47.7 in October from a revised 53.4 in September.

The worse-than-expected news stoked concerns in the world's biggest economy that a recovery from recession was going to take longer than thought.

The "unexpected drop in the Conference Board?s Consumer Confidence Index is a worrying development," said VTB Capital Neil MacKinnon.

"Clearly, the drop in consumer confidence immediately raises the question as to whether the US economy will suffer a relapse leading to 'double-dips' and 'W-shaped' recoveries.

"Equity markets are struggling to maintain upward momentum and Asian markets are about 1.0-1.5 percent lower in the overnight session."

Asian shares fell for a second successive day Wednesday as general weakness on Wall Street pushed investors towards further selling. There were heavy losses in Shanghai, Sydney and Hong Kong.

Hong Kong shares tumbled 1.84 percent while Tokyo shed 1.35 percent as investors refrained from buying as the yen strengthened against the dollar, hitting exporters, following the latest downbeat US data.

In Europe on Wednesday, German software group SAP cast a shadow over the Frankfurt market after it warned that annual sales will be less than expected after earnings fell short of forecasts.

The company's share price dived 6.96 percent to 32.015 euros in Frankfurt.

"There is a lack of conviction across the markets," said Cranny at MF Global.

"SAP in Germany has spelled out the corporate truth -- they are achieving their margins with no top-line growth."

Trade on Wall Street was uneasy as dealers began to shift their focus from recent upbeat corporate results to less than sparkling economic data, analysts said.

The Dow Jones Industrial Average had edged up 0.14 percent on a volatile day Tuesday but the tech-heavy Nasdaq fell 1.20 percent and the broad-market Standard & Poor's 500 index retreated 0.33 percent.