European shares finished down 0.66 percent.
Investors reacted to the euro zone GDP contraction figures as well as a report that the International Monetary Fund’s latest forecast is that US, European and Asian banks and insurers’ toxic debts could spiral to four trillion dollars. In addition, European Central Bank executive board member Juergen Stark warned the G20’s efforts to boost the IMF’s firepower could stoke inflation. Financial stocks were poor performers as various high-profile commentators voiced renewed concerns about the health of the banking system. Mike Mayo of Calyon Securities predicted the banking sector’s problems had further to run, and billionaire investor George Soros said the whole banking system “is basically insolvent”. Standard Chartered was down 6.3 percent, Lloyds slipped 8.5 percent, Societe Generale fell two percent, and UBS shed 5.2 percent. Energy shares tracked lower crude prices. Also down were building industry firms and carmakers slipped after BMW revealed poor car sales in March.