European stocks continue to drop

European stocks extend its losses after Federal Reserve Chairman Ben S. Bernanke said the bank may end bond purchases next year if the economy strengthens in line with forecasts.

Rio Tinto Group led mining companies lower as a gauge of Chinese manufacturing fell.

Swatch Group AG fell to the lowest in almost two months after Swiss watch exports dropped.

Eurotunnel Group SA tumbled 5.3% after Les Echos reported the European Commission will demand a reduction in tolls to use the Channel Tunnel.

The Stoxx Europe 600 Index fell 1.7% to 287.33, the biggest decline in a week. All 19 industry groups retreated and 25 shares slipped for each one that advanced. The measure has lost 7.5% since May 22, when Bernanke indicated the U.S. central bank could pare stimulus measures as the economy heals.

“The extreme levels of support provided by central banks to risk assets may be nearing a turning point,” experts of Barclays Plc said. “Our economists now expect the Fed to start tapering asset purchases in September 2013. We advise caution near term, though the current high equity risk premium should cushion against an excessive decline in sentiment.”

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