Stocks plunge as growth slows

European stocks dropped to their lowest levels for three months on the back of slower than anticipated growth in the eurozone economy and fresh fears of a Greek default.

The eurozone economy grew by just 1.4% in 2011, below initial expectations, and slow enough to qualify the region for what Europe called a “mild recession”.

Eurostat had anticipated growth of 1.5% last year, following on from a 1.9% rise in 2010.

The first quarter of this year is likely to show a further contraction in the region’s economy.

The equity markets were hit yesterday — the Euro Stoxx 50 down by over 3.4% — also by the latest concerns emanating from Greece.

London’s FTSE 100 fell by 1.86%, yesterday, far less in percentage terms than its leading European counterparts — both Paris’ CAC-40 and Frankfurt’s DAX down by between 3% and 4%.

In Dublin, the ISEQ dipped by just under 100 points, or by nearly 3%. There were notable falls for the likes of Smurfit Kappa Group, Grafton, &&United Drug and DCC.

The main Wall Street markets were all down by over 1%. Tokyo’s Nikkei and the Hang Seng, in Hong Kong, had previously closed by 0.6% and 2.16% respectively.