Europe Roundup: Down sharply

LONDON: European shares took another hit yesterday on fears Franco-Belgian bank Dexia may need to be rescued due to its exposure to Greek debt in what investors see as evidence of the eurozone sovereign debt crisis spreading to the banking sector.

"What you are now beginning to see is they (investors) are now picking out the banks. Dexia is the weakest," said Justin Urquhart Stewart, director at Seven Investment Management.

In midday deals, London's benchmark FTSE 100 index was down 2.33 pe rcent at 4,957.14 points, Frankfurt's DAX 30 tumbled 3.20 per cent to 5,205.85 and in Paris the CAC 40 slid 2.42 per cent to 2,856.06. Madrid lost 2.26 per cent and Milan 2.31 per cent.

The FTSEurofirst 300 index of top European shares was down 3.3 per cent at 882.20 points at 1207 GMT, while the STOXX Europe 600 Banking Index fell 4.8 per cent. - Agencies