European stocks hit day's lows on weak US open

European shares extended losses to trade near the day's lows yesterday after a weak opening on Wall Street and as banks fell on continuing concerns about the impact of the credit market crisis.

At 1343 GMT, the FTSEurofirst 300 index of top European shares was down 1.4 per cent at 1,310.69 points, with banks taking the most points off the benchmark.

BNP Paribas fell 1.6 per cent after chief executive officer Baudouin Prot said the bank may not match last year's investment banking revenues as the trading environment was "very adverse".

Santander was off two per cent and Barclays fell three per cent.

Techs were weaker after a bearish update from Advanced Micro Devices, with German chipmaker Infineon tumbling 6.3 per cent. Handset maker Nokia fell 2.6 per cent, making it the top weighted loser on the pan-European benchmark.

The Dow Jones industrial average, the S&P 500 and the Nasdaq were down 0.6-0.8 per cent. US stocks were hit by savings and loan company Washington Mutual Inc saying it expected a first-quarter loss of more than $1 billion and was cutting its dividend.

British banks were additionally pressured by data from mortgage lender Halifax that said house prices had fallen 2.5 per cent in March - the biggest monthly drop since September 1992, when Britain was emerging from a recession.

Shares in Royal Bank of Scotland were also down three per cent while HBOS lost 2.5 percent.

"It's still looking very jittery at the moment. We've had the banking problems wane away a little bit but there's still uncertaintiy surrounding the sector... now that the dust has settled and the rally's over," said James Hughes, market analyst at CMC Markets.

Late on Monday, US tech firm Advanced Micro Devices Inc, the second-largest maker of computer processors, gave a first-quarter revenue estimate below forecasts and announced plans to cut 10 per cent of its workforce in a signal that the sector was not immune from the global credit crisis.

German chipmaker Infineon slid 6.3 per cent, while chip equipment maker ASML lost nearly six per cent.

Also weighing on the tech sector, Dutch navigation device producer TomTom hit a 32-month low and was languishing down 10 per cent after it lowered its 2008 revenue outlook. "They're fresh fears. Going back a few months there was talk the tech stocks would be the only ones avoiding the subprime crisis ... the US tech stocks have put the fear in the market and that's had a knock-on effect," Hughes said.

German bank Deutsche Borse slid six per cent, with traders attributing the slide partly to a surge in volumes reported by an alternative trading platform, Chi-X.

The DJ Stoxx basic resources index fell 2.5 per cent as metal prices weakened. Miner Rio Tinto losing two per cent after it said it was still dismissive of the $135 billion all-stock hostile takeover bid by BHP Billiton. BHP shares lost 1.7 per cent.

Around Europe, the UK's FTSE 100 index slipped 0.9 per cent, Germany's DAX index lost 1.2 per cent and Frances CAC 40 dropped one per cent.