European markets were lower on intensifying worries concerning the subprime sector.
The FTSE Eurofirst 300 fell 1.82 percent to 1,526.04.
In Madrid the IBEX dropped 1.11 percent to 14,838.3, while the Dax was 2 percent lower to 7,453.59 in Frankfurt and the Paris CAC-40 dropped 5,624.78.
Banks declined after BNP Paribas (Euronext: BNP; TYO: 8665) said it was suspending withdrawals from 3 funds due to issues related to the subprime sector problems in the United States.
BNP dropped 3.4 percent to €82.57 on the announcement.
Among other banks Deutsche Bank (FWB: DBK; NYSE: DB) was 3.94 percent lower to €98.43, while Credit Agricole (Euronext: ACA) fell 4.11 percent to €27.76, Societe Generale (Euronext: GLE) was 4.22 percent lower to €128.63 and Commerzbank (FWB: CBK) dropped 4.31 percent to €29.96.
Commerzbank was lower even though it reported that profits were double last year’s during the same period and said that the current problems in the subprime sector would not keep it from surpassing its target for profit in the full year.
The situation wasn’t helped by news that the European Central Bank had loaned €94.8 billion on a sudden demand for cash from banks, sending overnight lending rates to their highest level in 6 years, a state of affairs that some analysts labeled a sign of panic.
Elsewhere, airlines were also lower on the session.
Lufthansa (FWB: LHA) was 4.25 percent lower to €19.86, while Air France (Euronext: AF; NYSE: AKH) had the worst performance of the day on the CAC-40 with a drop of 6.27 percent to €30.20.
There were some gains on the day.
STMicroelectronics (Euronext: STM; NYSE: STM) had the best day on the CAC-40 as it added 0.92 percent to €12.11, while Volkswagen (FWB: VOW; OTC: VLKAY) was the best performer on the Dax with a gain of 1.27 percent to €141.33.
In the telecommunications sector, Deutsche Telekom (FWB: DTE; LSE: DEU; NYSE: DT; TYO: 9496) was up 0.84 percent to €13.23 even though it reported that profits were lower in the second quarter.