By Min Zeng
Fears about the pace of global growth hit financial markets hard Tuesday as U.K. stocks hit a 2010 low and Chinese shares led an Asian tumble.
Markets were sharply weaker in early trade and got an additional knock from a dismal reading of U.S. consumer confidence.
In Europe, investors were also worried that the expiration of the ECB's €442 billion ($542 billion) one-year funding program on Thursday might cause a liquidity shortfall in the financial system, sending a jolt through the banking sector. Crédit Agricole /zigman2/quotes/200767526/composite ACA -1.65% lost 7.9% and Intesa Sanpaolo fell 6.9% as the pan-European Stoxx 600 index ended down 3% at 243.82.
In LONDON , the FTSE 100 index slid below 5000 for the second time this year, falling 3.1% to a 2010 low of 4914.22.
In PARIS , the CAC-40 index lost 4% to 3432.99.
In FRANKFURT , Germany's DAX index fell 3.3% to 5952.03.
Among basic-resource stocks, which are closely tied to global growth, ArcelorMittal /zigman2/quotes/202790215/composite MT +0.21% fell 6.3% and Rio Tinto dropped 6.4%.
Elsewhere, Chloride Group rose 11% to 387 pence ($5.85) after Emerson Electric /zigman2/quotes/200181610/composite EMR +0.88% bid 375 pence a share, or £997 million, for the U.K. power-systems company, which trumps the 325 pence a share bid made by ABB /zigman2/quotes/209404356/composite ABB +1.00% . ABB, which said it is considering its options, declined 4.1%.
HMV Group, the music and video games retailer, shot up 7% ahead of its annual results due Wednesday.
Carpetright /zigman2/quotes/208063953/delayed UK:CPR 0.00% , a U.K. carpeting retailer, slumped 9.9%. It reported annual results slightly below expectations and offered a "subdued" outlook, according to analysts at Singer Capital Markets.
In SHANGHAI , China's Shanghai Composite fell 4.3% to 2427.05, its lowest close since April 2009, on concerns the mainland economy could slow in coming months.
Property, airline and metal stocks were big losers. Gemdale slumped 9.9% and Poly Real Estate Group /zigman2/quotes/201864015/delayed CN:600048 -2.30% dropped 7.1%, Jiangxi Copper tumbled 7% and Hainan Airlines /zigman2/quotes/203177958/delayed CN:600221 -1.12% slid 8.8%. Banking shares also fell, though they slightly outperformed the main index. China Construction Bank /zigman2/quotes/208058581/delayed CN:601939 -0.14% dropped 3.5% and China Merchants Bank /zigman2/quotes/209899244/delayed HK:3968 -1.56% declined 3.6%.
The fall in China dragged down other regional markets.
In TOKYO , Nikkei Stock Average shed 1.3% to 9570.67, hurt by a sharp rise in the yen, which weighed on exporters.
Casio Computer /zigman2/quotes/202492162/delayed JP:6952 -0.53% fell 3.8%, Fanuc /zigman2/quotes/202054799/delayed JP:6954 +2.21% was off 2.2% and Isuzu Motors /zigman2/quotes/202637468/delayed JP:7202 -0.12% slipped 2.5%.
A few other exporters with high exposure to the euro zone outperformed the Tokyo market, supported by hopes that earnings will be better than previously expected. Sony /zigman2/quotes/208567357/composite SNE -1.38% rose 0.2% and Nikon /zigman2/quotes/203281219/delayed JP:7731 -1.53% fell 0.3%.
"These shares have reached levels where further weakness is unlikely in view of their earnings" and forecasts, despite lingering uncertainties surrounding the general European economic outlook, said Toshikazu Horiuchi , equity strategist at Cosmo Securities.
Elswhere, Hong Kong's Hang Seng Index dropped 2.3% to 20248.90, South Korea's Kospi declined 1.4% to 1707.76, India's Sensex fell 1.4% to 17534.09, and Singapore's Straits Times Index slid 1.4% to 2830.34. Australia's S&P/ASX 200 fell 0.9% to 4345.67.
Resource stocks stumbled across the region on concerns about demand. BHP Billiton /zigman2/quotes/208108397/composite BHP -0.29% dropped 1% and Woodside Petroleum /zigman2/quotes/203437212/delayed AU:WPL -0.59% skidded 1.6% in Sydney, Inpex declined 3.8% and trading house Mitsui & Co. lost 3.2% in Tokyo, Sterlite Industries fell 1.4% in Mumbai, and Cnooc tumbled 3.6% in Hong Kong.