European shares fell to a six-year low early on Friday as investors worried about further losses in the financial sector and data showed the British economy went into recession at the end of last year. At 1010 GMT, the FTSEurofirst 300 index of top European shares was down 2.3% at 745.39 points, and had been as low as 742.53, its lowest since April 2003. The index is heading for its 12th session of decline in thirteen sessions. Insurers fell on worries they will be hit by losses. Swiss Re fell 13.9%, extending the previous day's heavy losses, on worries it could make further writedowns when it reports full-year results due Feb. 19, traders said. Across Europe, London's FTSE is down 1.4%, France's CAC is lower by 1.8%, and Germany's DAX is off 1.9%. (Reuters)

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FT reports Britain fell deeper into recession after new figures revealed the economy contracted by 1.5% in the final three months of last year. The rapid decline in UK economic growth in the fourth quarter of 2008 was the worst performance since the second quarter of 1980, when the country was in the middle of steep downturn, and confirmed the economy grew at its slowest annual pace for sixteen years. Fourth quarter growth was weaker than the 1.2% decline economists on average had been expecting and follows a 0.6% contraction in the third quarter. For the whole of 2008 growth was just 0.7%.

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Times of London reports shares in Ireland's banks lost half their value yesterday in Europe amid renewed fears for the sector after the nationalisation of Anglo Irish last week and the announcement that Bank of Ireland's chief executive was standing down. "Everybody is vulnerable, with bad debts becoming a bigger and bigger problem," one Dublin trader said. Shares in Allied Irish Banks (AIB) were down 59%. Bank of Ireland (IRE) shares fell by 55%. Bank of Ireland runs savings accounts for the Post Office in the UK. Thousands of other British savers are thought to have pushed funds into Irish banks after Dublin established a €440 billion deposit guarantee. Bank of Ireland said that it would look at internal and external candidates for a new chief after Brian Goggin said that he would retire in the summer. A bank spokesman said that Mr Goggin's official retirement date had been June 2010, adding that he had an option to give one year's notice and thereby retire early. Bank of Ireland said that it would look at internal and external candidates for a new chief after Brian Goggin said that he would retire in the summer. A bank spokesman said that Mr Goggin's official retirement date had been June 2010, adding that he had an option to give one year's notice and thereby retire early.

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AP reports the European Union said it is facing a ''deep and protracted recession'' and slashed growth forecasts, while Britain announced its second massive bank bailout in just over three months in another wave of bad economic news in Europe. The economy in the 16 nations that use the euro will shrink by 1.9% in 2009, with the entire EU contracting 1.8%, the European Commission said. That is a drastic cut from its earlier forecasts of 0.1% for the euro zone and 0.2% for the EU. The 27-member bloc said 3.5 million jobs will disappear in the EU in the year ahead as business and household spending falls and banks tighten lending.

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Hong Kong shares kicked off 2009 on a firm note, rising 4.6 percent to a two-week high on Friday amid thin volumes, led by strong gains in Chinese telecom companies on hopes of the imminent issuance of 3G licences. Stocks across the board notched up strong gains on hopes that the flow of bad news that pushed Hong Kong's blue chip index to its worst drop in over three decades last year would subside in the new year while attractive valuations would tempt investors back into the equity market. The Hang Seng Index finished 655.33 points higher at 15,042.81 after opening up 0.4%. The index rose more than 6 percent this week, helped in part by year-end window dressing in the last week of December. Turnover stayed slim at HK$30.5 bln ($3.9 bln) with many market participants still away on holidays... The Sensex opened 70 points higher at 9,973, and soon slipped into negative zone to touch a low of 9,864. However, on expectations of the government announcing second stimulus package, the index bounced back on a strong rally in capital goods, realty and banking counters and crossed the 10,000-mark. The index touched a day's high of 10,070. Profit booking in last trading session saw the index pare gains and finally settled with a gain of 55 points at 9,958. The market breadth was positive - out of 2,600 stocks traded, 1,702 advanced, 820 declined and 78 were unchanged today. (Reuters, Business Standard)