European stocks tumble with banks hammered

European shares fell more than 2% to their lowest level in two and a half years. The financial sector were hammered after Goldman Sachs’ analysts cut their ratings on US investment banks and predicted more writedowns for Citigroup and Merrill Lynch. That reignited fears of bank further losses in Europe.

Dutch-Belgian banking and insurance group Fortis fell 19% after it said it will have to shore up its balance sheet with measures worth over eight billion euros, including scrapping its interim dividend and issuing new shares.

Sporting-goods maker Adidas fell after its rival Nike reported lower orders in the US. As the Federal Reserve has given no hint of an imminent interest rate rise, the dollar slipped which boosted oil prices.

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