Eurostoxx 50: 2,216.70 (–22) Frankfurt DAX: 5,584.14 (–96.94) Paris CAC: 3,119 (–20.56)EUROPEAN STOCKS declined yesterday, snapping three days of gains, as Germany's DAX Index tumbled 4 per cent in 15 minutes on speculation that regulators plan to impose new restrictions on equity markets.

Restrictions Authorities in France, Spain and Italy must all decide whether to extend short-selling bans that are due to expire over the next 48 hours. A spokeswoman for France’s Autorite des Marches Financiers, who declined to be identified, said the regulator will announce a decision after markets close.

“It looks like someone fears the update today from French and Spanish regulators will extend the short-selling ban,” said Michael Scholz, executive director for client solutions and derivatives at WestLB in Dusseldorf.

“It was a strange move selling the DAX futures in 30 minutes. Someone may be preparing their portfolio for tomorrow,” he said.

National benchmark indexes slid in every western European market except Austria.

European stocks dropped after US jobless claims unexpectedly climbed by 5,000 to 417,000 in the week ended August 20th, Labor Department figures showed yesterday in Washington. Economists had predicted that they would fall to 405,000.

RWE and EON, the country’s biggest utilities, slumped 3.5 per cent to €25.46 and 3.1 per cent to €14.68, respectively.

Allianz tumbled 3.2 per cent to €67.75.

Retail stocks fell 2.3 per cent for one of the biggest declines among the 19 industry groups in the Stoxx 600 as Ahold plunged 6.2 per cent to €7.83.

Ahold reported an unexpected drop in second-quarter profit because of increased US competition.

Credit Agricole surged 4.8 per cent to €6.51. The bank said second-quarter profit fell 11 per cent to €339 million.

Premier Oil plunged 9.7 per cent to 316p. The London-based oil explorer said it’s concerned whether Sevan Marine can deliver a unit to start pumping crude at the UK’s Huntington field in 2012.

Diageo, the maker of Johnnie Walker scotch and Smirnoff vodka, rose 4.7 per cent to 1,170p.

International Power, the UK utility controlled by GDF Suez, rallied 2.5 per cent to 314.9p. – (Bloomberg)