European shares fell by midday on Friday on investors' worry about the eurozone sovereign debt problems and on nervousness ahead of key U.S. jobs data, with banks the major fallers.
By 1147 GMT, the pan-European FTSEurofirst 300 index of top shares was down 2.1 percent at 972.39 points after touching 970.33 — the lowest since early November of last year.
"It is all about Greece, Spain and Portugal. The market is worried about whether the peripheral states in Europe are going to have a contagion effect on the whole of the euro zone," said Jim Wood-Smith, head of research at Williams de Broe.
"Nobody is taken anything for granted. We are seeing German CDS spreads widening which suggests there is a degree of irrationality and fear going on. There is no chance at all of Germany defaulting on its debt."
The cost of insuring Greek, Portuguese and Spanish government debt against default shot up to record highs and benchmark German Bunds rose sharply.
Banks took the most points off the index. Banco Santander, Barclays, BNP Paribas and Credit Suisse fell 2.1 to 3.7 percent.
Britain's ICAP, the world's biggest interdealer broker, slumped 18 percent after it gave disappointing full-year profit guidance, with margins down as new businesses were taking longer than anticipated to turn a profit.
Across Europe, the FTSE 100 index lost 1.8 percent, Germany's DAX dropped 1.5 percent and France's CAC 40 fell 2.5 percent.
Spain's IBEX 35 shed 2.4 percent, Greek stocks slipped 3.9 percent and Portugal's PSI 200 fell 3.8 percent.
ENERGY WEIGHS
Energy stocks were among the worst performers. British gas producer BG Group lost 4.7 percent after its fourth-quarter earnings, excluding non operations, missed expectations.
BP, Royal Dutch Shell and Total slipped 1.4 to 2.3 percent.
Global stock markets suffered this week on fears that troubles in Greece and other southern members of the eurozone, including Portugal and Spain, could impede or even derail an economic recovery that helped equities surge in 2009.
The Greek prime minister tried to calm investor fears about the credit-worthiness of his government after eurozone debt woes provoked a rare direct policy response from the Swiss central bank, which intervened in its own name in Asian foreign exchange trading to weaken its currency against the euro. The Portuguese government's defeat over a regional finance bill, a climbdown by the Spanish government over pension reform, and protests by Greek tax officials have added to the woes of states struggling to cut budget deficits bloated by recession.
"It's clear that the (stock) market is shifting from extremely risk-loving to once again becoming risk-averse and this is an environment to be extremely cautious (of)," said Philippe Gijsels, senior equity strategist at BNP Paribas Fortis.
"We are clearly in a correction mode. If U.S. job figures are good, the market could see some bounce from oversold levels."
At 1330 GMT, investors will eye the U.S. non-farm payrolls data for fresh clues on the extent of the economic recovery in the country.
On the upside, Compass Group gained 4.7 percent after it said it had made a good start to the year.
