European stocks end down

European stocks fell for a third session in a row yesterday as a sharp drop in oil and a rebound in the dollar sparked a late selloff, with ING sinking 18 per cent after it unveiled plans to split up the company.

Insurance shares took a beating after the Dutch bancassurer said it would transform itself into a smaller European lender and launch a €7.5 billion rights issue.

Allianz dropped 4.4 per cent and Aegon fell 6.5 per cent. Banks also ended in the red, with BNP Paribas down 3.7 per cent and Credit Suisse down 2.6 per cent.

The FTSEurofirst 300 index of top European shares ended 1.2 per cent lower at 996.50 points, its lowest closing level in nearly two weeks.

Around Europe, UK's FTSE 100 index fell one per cent while both Germany's DAX index and France's CAC 40 dropped 1.7 per cent.

A sudden flight to quality sent the dollar rallying from 14-month lows versus the euro while risky assets such as equities and commodities tumbled.

US crude oil futures sank more than $2 a barrel, or 2.7 per cent, to $78.31, forcing most energy stocks to surrender early gains, with both Total and Repsol ending down 1.1 per cent.

The VDAX-NEW volatility index - a gauge of investor risk aversion - jumped 11 per cent to a near three-week high.

The higher the volatility index, which is based on sell and buy options on Frankfurt's top 30 stocks, the lower investors' appetite for risky assets.