European stock markets fell for the fourth straight day yesterday, undermined by another downward revision to first quarter US growth figures.

Asian markets earlier in the day also extended losses on renewed nervousness for global recovery prospects. Wall Street opened in positive territory but momentum quickly turned negative.

As leaders of the Group of 20 developed and developing countries were gathering for a summit in Toronto, where differences in US and European economic strategies were threatening to emerge, the United States again issued a downward correction to its growth figures.

The Commerce Department said the economy grew at a weaker-than-expected 2.7 per cent rate in the first quarter, a third and final revision.

The estimate was the second downward revision of gross domestic product growth for the January-March period, which was initially calculated at 3.2 per cent before being adjusted down to three per cent in late May.

Analysts at Briefing.com said the final figure was "disappointing," adding that "the negative revision was unexpected."

But they said that "the fact that GDP remained near its potential 2.8 per cent long-term growth rate will not alter our view about the stability of the economic recovery."

The news nonetheless dampened sentiment in Europe, where investors and analysts were awaiting the outcome of the G20 meeting this weekend.

The US ahead of the summit has voiced fears that too hasty a withdrawal of stimulus spending in Europe, in order to reduce deficits, could derail a global recovery.

In Paris, a stock market trader said: "The downward revision for the second time in first quarter US growth combined with first disappointing financial results statements from US companies weighed on the Paris market."

The London FTSE 100 index lost 1.05 per cent to close at 5,046.47 points while in Paris the CAC 40 gave up one per cent to finish at 3,519.73. The Frankfurt the DAX lost 0.73 per cent and closed at 6,070.60 points.

Elsewhere there were losses of 0.72 per cent on the Swiss Market Index, 0.58 per cent in Brussels and 0.54 percent in Madrid. The Milan exchange managed a 0.10 per cent gain.

In London BP was among the day's big losers, plunging at one point to a 14-year low after the group ramped up the costs so far of its oil spill crisis in the Gulf of Mexico to $2.35 billion (€1.9 billion).

The company's stock collapsed by almost nine percent in mid-morning trading to plumb a low of 296 pence on the London Stock Exchange, hitting a level last seen in August 1996, as investors showed alarm over spiralling costs.

Shares later pulled back slightly to end at 304.6 pence, down 6.35 per cent.

In Paris cyclical stocks, dependent on robust growth momentum, lost ground. Auto maker Renault shed 2.94 per cent, chemical group Rhodia fell 3.49 per cent and steel giant ArcelorMittal shed 3.02 per cent.

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