Thursday 5th March

European shares finished the day down 4.5 on word that euro zone GDP fell by a record 1.5 percent in the final quarter of last year and as the ECB painted a bleak picture about the region’s economy in 2009.

A collapse in exports and a fall in private demand and investment produced the deepest ever quarter-on-quarter fall in euro zone economic activity in the final three months of 2008. Economists said the very sharp fall in consumer spending suggested the first quarter of this year could be as bad. Financial stocks were the biggest losers. Axa, Old Mutual, BNP Paribas and Deutsche Bank lost between six and 13 percent. Insurer Aviva’s shares plunged by nearly a third due to concerns over its capital. The markets were also hit by the world’s second biggest car maker General Motors saying it faces bankruptcy if it fails to stem its losses and generate cash. GM said its auditors have raised “substantial doubt” about its ability to survive outside bankruptcy as it continues to burn through cash. GM is asking the US government for up to 30 billion dollars in aid to restructure. Commodity stocks were another standout losing sector as crude oil and base metal prices slipped.