European equity markets retreated in morning trade today as concerns about the crisis in money markets dragged banking stocks lower.
Trading was expected to remain cautious ahead of tomorrow's meeting of the US Federal Reserve. The US central bank is widely expected to cut US interest rates in response to the current turmoil in credit markets.
The FTSE Eurofirst 300 fell 22.3 points, or 1.5 per cent, to 1,484.91, while in Frankfurt, the German Xetra Dax sagged 49 points or 0.7 per cent to 7,448.2. In Paris, the French CAC 40 dropped 82.8 points, or 1.5 per cent, to 5456.1.
Restructuring in the European banking sector is widely expected due to the credit market crisis. KfW, the German state development bank, is considering selling its 38 per cent stake in IKB, the German bank that was one of the first victims of the problems of the US subprime lending market crisis. IKB fell 3.1 per cent to €13.13.
Nokia, up 1.4 per cent to €24.66, was among the leading gainers, however, after the world's top mobile phone maker announced it had agreed to buy Enpocket, a US mobile advertising company.
Deutsche Telekom, unchanged at €13.67, said that its mobile phone business, T-Mobile USA, had agreed to buy Suncom Wireless in the United States for around $1.6 billion.