EU STOCKS sink to 2013 low on Fed taper hints

Europe’s benchmark index slid to the lowest closing level in 2013 on Thursday, in its first chance to react to Federal Reserve Chairman Ben Bernanke’s comments a day earlier that the U.S. central bank may scale back its bond purchases this year, depending on the economic outlook.

The Stoxx Europe 600 index  dropped 3% to 283.68, marking the worst daily percentage performance since November 2011.

The purchasing manager’s indexes for the euro zone showed the region’s downturn eased in June. The composite output PMI reading climbed to a 15-month high of 48.9 from 47.7 in May, exceeding analyst expectations. The manufacturing PMI rose to 48.7 from 48.3 in May, marking the highest level in 16 months.

Among notable movers in Europe, mining firms posted some of the biggest losses after data showed factory activity in China slowed further in June. The “flash” version of HSBC’s manufacturing Purchasing Managers’ Index fell to a nine-month low of 48.3, down from May’s final reading of 49.2.

Shares of Rio Tinto PLC dropped 4.5% in London and BHP Billiton PLC fell 4.6%.

Banks were also lower in the U.K. after the Bank of England identified a 27.1 billion-pound ($41.96 billion) capital shortfall for five top British banks. Shares of Barclays PLC dropped 4.4% and Royal Bank of Scotland Group PLC fell 5%.

The FTSE 100 index erased 3% to 6,159.51, worst daily performance since Sept. 22, 2011.

France’s CAC 40 index lost 3.7% to 3,698.93, while Germany’s DAX 30 index shaved off 3.3% to 7,928.48.

Car makers were among major decliners in both Paris and Frankfurt. Renault SA slid 6.8% in France, while BMW AG dropped 4.8% and Daimler AG gave up 4.6% in Germany.

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