European stocks ended the trading session down four percent on Wednesday, a 5-1/2-year closing low. Frankfurt and London were both around five percent lower. Investors are fearful that corporate profits are going to be hit by the recession.

Banks lost value; BNP Paribas shedding 11.2 percent, HSBC falling 9.1 percent, Barclays down 13.3 percent and Societe Generale declining 7.8 percent. Pharmaceuticals fell as did mining companies with prices of copper, lead, nickel, tin and zinc all down.

Chemical company BASF suffered double digit losses – down 13.7 percent – after it issued a profit warning. Swedish steelmaker SSAB slumped after predicting lower deliveries. Investors were also spooked by US consumer prices falling at their fastest rate on record in October. That implies the world’s biggest economy is weakening further as consumer demand slows. There was also grim news on US house construction.

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