EUROPEAN stocks are coming off the biggest weekly drop in a month after JPMorgan Chase & Co reported a US$1.5 billion loss on mortgage-backed assets, deepening concern that banks will post more writedowns.

Hypo Real Estate Holding AG fell as the German lender said profit tumbled 95 percent, Bloomberg News reported at the weekend. Standard Chartered Plc sank after analysts downgraded the shares on speculation the bank may have to raise capital. Swiss Life Holdings led insurers lower after it agreed to buy stakes in MLP AG and AWD Holding AG. Eurasian Natural Resources Corp paced a retreat among mining companies.

Europe's Dow Jones Stoxx 600 Index slipped 0.7 percent to 287.25, the steepest decline since the week ended July 11. The benchmark is down 21 percent this year as asset writedowns and credit losses at financial firms topped US$500 billion worldwide, threatening to prolong the slowdown in global economic growth. JPMorgan's figures "spooked investors and triggered profit-taking in financials," said Piers Hillier, the London-based head of European equities at WestLB Mellon Asset Management. "Concern Standard Chartered will need to raise more capital didn't help,'' Hillier said.