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European equities continue to plunge on U.S. concerns

LONDON — Share prices plunged across Europe Wednesday morning, led by telecoms and bank stocks, despite a bounce overnight on U.S. equity markets.

By early afternoon the FTSE Eurotop 100 Index of leading shares was down 3.20% at 3020, as fears rose of further losses on Wall Street after U.S. stock index futures declined.

In London the FTSE-100 Index was down 3.48 percent at 5,521, after a weak early- morning rally evaporated. Vodafone Group PLC, one of the U.K.'s largest stocks in market capitalization terms, was down 4.52 percent at 190 pence. Cable & Wireless PLC fell 11.19% to 484 pence in the wake of a revenues warning Tuesday.

Banks also suffered as credit rating agency Fitch put 19 Japanese banks on credit watch in response to growing concerns over the impact of falling share prices and lingering asset quality problems on the banks' capital quality, performance and prospects.

In Frankfurt the DAXX stock index was down 3.96% at 5,726, dragged down by car makers DaimlerChrysler AG, down 4.91 percent at 50.40 euros, and BMW AG, down 6.45 percent at 35.55.

The CAC-40 in Paris was down 3.37 percent at 5,011. Major losers there included media giant Vivendi Universal SA, down 2.71% at 66.40 euros and France Telecom, down 2.66 percent at 62.10.

In the currency markets the euro reversed its losses after falling to a 16-day low against the U.S. dollar of 0.9078, firming to 0.9180 after a fall in U.S. stock index futures.

The dollar strengthened against the yen to a 20-month high of 121.08, boosted by Fitch's announcement.

European debt markets were higher, as investors looked for a move into perceived safe haven investments. The yield on the benchmark German 10-year government bond, or Bund, again fell below 4.70%.

U.K. bonds, or Gilts, were also sharply higher, with the LIFFE June contract 57 basis points higher at 117.53.