Europe plunges to new lows

Accounting concerns and Wall Street declines drove markets lower

LONDON, England (CNN) -- European markets plunged to fresh lows on Thursday, led by insurance stocks, as accounting concerns continued to plague bourses on both sides of the Atlantic.

London's FTSE 100 dropped plunged 190 points, or 4.3 percent, to 4,230 -- its worst finish in five years -- wiping £45 billion ($69.75 billion) off the value of the blue-chip index.

The CAC 40 blue chip index in Paris lost 144.28 points, or 3.95 percent, to 3,512.10, its lowest level in almost four years. Frankfurt's electronically traded Xetra Dax was down 80.5 points, or 1.92 percent, to 4,109.64 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 3.7 percent to 987.69 in late trading -- the lowest point since last September. The insurance and banking sub-indices led the declines.

"Sentiment is very, very poor, plagued by geopolitcal and accounting concerns as well as worries about the nature of the economic recovery and corporate greed -- the list is endless," Mark Hargraves, a European fund manager at Framlington, told Reuters.

Investors were shaken by the latest company casualty of the U.S. accounting scare, telecoms group Qwest Communications (Q), which said on Wednesday it was under criminal investigation by federal authorities. Then on Thursday, pharmaceutical giant Bristol-Myers Squibb (BMY) confirmed it is being investigated by the Securities and Exchange Commission, but wouldn't comment on the nature of the inquiry.

The new accounting scares -- along with lingering worries for corporate debt and weak profits -- spilled over to Europe, pushing markets down for the fourth day in a row. Insurers, who have seen their stocks tumble in recent weeks, were among the hardest hit again on Thursday.

"Insurers have been battered recently compared to their U.S. counterparts because they have a higher equity weighting in their portfolios, which makes them more highly geared to market weakness, and their lack of excess capital," said Hargraves.

Zurich Financial plunged 21.1 percent, while the UK's Aviva (AV), formerly CGNU, fell 10.6 percent, Royal & Sun Alliance (RSA) lost 8.6 percent and Germany's Munich Re (FMUV2), the world's biggest reinsurer, dropped 4.8 percent.

Telecom stocks initially sank after the latest Nasdaq tumble to 1997 lows, although some recovered after investment bank Morgan Stanley raised its view on wireless services operators to "attractive" from "in-line."

Deutsche Telekom (FDTE) was up 2.2 percent to 11.39 euros in late Frankfurt trading as speculation grew that chief executive Ron Sommer would soon resign or be fired. (Full story)

Meanwhile, France Telecom (PFTE), Europe's second-largest phone company, turned negative after notching up early gains. It closed down 8.1 percent to 12.32 euros. France Telecom's mobile phone unit Orange (PORA) lost 5.2 percent to 4.36 euros.

Vodafone Group (VOD), Europe's biggest mobile phone operator, dropped 2.3 percent to 88.43 pence.

Nokia, the world's biggest mobile phone maker, fell 5.6 percent to 13.67 euros, while Swedish rival Ericsson dropped 7.6 percent to 14.60 crowns.

Vivendi Universal (PEX), the world's biggest media company, lost 4.3 percent to 16.20 euros, extending the previous session's 7.5 percent on news that French securities regulators had raided the group's Paris office as part of a probe into its accounting.

Auto stocks tumbled after the latest Western European car registration numbers showed sales fell 8 percent in June, compared with the same month a year ago. (Full story) Renault, (PRNO), France's second-largest car maker, lost 4.8 percent to 42.77 euros, while Europe's biggest car maker Volkswagen (FVOW) was down 2.1 percent to 41.95 euros.

The AEX index in Amsterdam fell 4.4 percent, Milans' MIB30 lost 3.1 percent and the SMI in Zurich declined 4.1 percent.

In the U.S. on Thursday, markets were weak in early trading as investors faced competing influence of accounting questions at Bristol-Myers Squibb (BMY), a downgrade of General Motors (GM) and increased jobless claims amid improved guidance from Wal-Mart Stores (WMT) and Eastman Kodak. (EK)

At midday, the Dow Jones industrial average was up 5.61 points, or 0.1 percent, 8,819.11, while the Nasdaq composite index was up 12 points, or 0.9 percent, to 1,358.03.