Stocks sink as US bailout hopes dim

European stocks fell sharply Friday amid uncertainty over the US government's $700bn (€479bn) rescue plan for the financial sector.

"Fears that the troubled assets recovery plan might be delayed or watered down in a way that makes it less effective have exacerbated money-market tensions even beyond the extreme levels touched a week ago, when the mood in financial markets was apocalyptical," said Marco Annunziata, global chief economist at UniCredit in London.

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