Eurostoxx 50: 2,096.10 (–63.18) Frankfurt DAX: 5,415.91 (–157.60) Paris CAC: 2,940 (–91.08)EUROPEAN STOCKS slumped yesterday, halting a four-day rally for the Stoxx Europe 600 Index, as investors speculated that Greece may not receive an aid payment that would help it avoid default.

Deutsche Bank led banks lower after Germany’s ruling party lost another regional election.

Mining companies and oil producers fell as base metals and crude oil dropped.

The benchmark Stoxx 600 dropped 2.3 per cent in London, paring last week’s 2.5 per cent advance.

“Politically, there is a will for Greece to make its next payment,” said Sailesh Bhundia, senior portfolio manager at EFG Asset Management in London.

National benchmark indexes declined in every western European market.

In Greece, international monitors will assess whether prime minister George Papandreou can meet the conditions of the country’s rescue loans.

Separately, German chancellor Angela Merkel’s party lost a regional election in Berlin, the last of seven state ballots this year in which voters have punished the governing coalition parties for their handling of the sovereign-debt crisis.

Deutsche Bank and Commerzbank, Germany’s largest lenders, led a gauge of European bank shares lower, falling 4.5 per cent to €23.96 and 4.1 per cent to €1.69, respectively.

Société Générale, which was downgraded by Moody’s on September 14th, sank 6.7 per cent to €17.69. Credit Suisse declined 6.2 per cent to €21.31.

Lloyds Banking slumped 6.7 per cent to 33.42p as the bank said Finance Director Tim Tookey will leave the UK’s largest mortgage lender to join Friends Life.

BHP Billiton slipped 3.4 per cent to 1,935p and Antofagasta tumbled 8.2 per cent to 1,194p as base metals retreated in London.

Total retreated 1.8 per cent to €32.16 and BP slipped 1.5 per cent to 407.4p as crude oil fell to near its lowest price in two weeks.

Michelin sank 6 per cent to €45.53 after Morgan Stanley lowered its recommendation for the world’s second-largest tyre maker.

Temenos dropped 7.4 per cent to 14.35 francs after Morgan Stanley downgraded the banking-software maker to “equal weight” from “overweight”. – (Bloomberg)