Key European Stock Index Edges Close To Life Low

Across Europe, the FTSE 100 index, Germany`s DAX and France`s CAC 40 were down 3.9=5.3 percent.

European equities ended sharply lower on Monday as banking stocks tumbled after American International Group posted record losses and HSBC announced Britain's largest ever rights issue.

The FTSEurofirst 300 index of top shares provisionally closed 4.9 percent lower at 683.84 points -- the lowest close in six years and within 3 points of a lifetime low of 681.17 points hit in March 2003.

The index has fallen 14 percent so far this year after plunging 45 percent in 2008 on the back of a financial crisis that began with U.S. mortgage defaults in 2007 and has cast much of the world into a deep and vicious recession.

Energy stocks also came under severe pressure after crude prices tumbled more than 9 percent as a deteriorating world economy threatened to cut further into fuel consumption.

Standard Chartered Bank fell 11.6 percent, Lloyds was down 15.3 percent and slipped 9.3 percent. HSBC plunged 18.8 percent after it launched a 12.5 billion pound rights issue as annual profits more than halved.

"Market conditions are extremely difficult. Quite a lot of investors have gone into the survival mode, just like the companies. Capital preservation is the key at the moment," said Philippe Gijsels, senior equity strategist at Fortis Bank.

Among energy stocks, BP, Royal Dutch Shell, BG Group, Tullow Oil, Repsol, Total and StatoilHydro shed 3.6-5.8 percent.

Across Europe, the FTSE 100 index, Germany's DAX and France's CAC 40 were down 3.9=5.3 percent.