EUROPEAN stocks fell for the first time in five days yesterday as evidence the global economy is slipping into a recession overshadowed declining money-market rates. United States index futures were little changed, while Asian shares advanced.

Barclays, the UK's second-biggest bank, slumped 6.1 percent, and Vodafone, the world's largest mobile-phone company, slipped 6.9 percent. Daimler, the world's second-biggest luxury-car maker, slumped 2.9 percent.

Europe's Dow Jones Stoxx 600 Index lost 0.7 percent to 220.36 at 1:30pm in London. Futures on the Standard & Poor's 500 Index fell 0.3 percent.

The European Commission said yesterday that the region's economy probably entered a recession in the third quarter and trimmed its growth forecast for this year to 1.2 percent from 1.3 percent. Manufacturing in the UK shrank for a sixth month in October, according to the Chartered Institute of Purchasing and Supply's index of manufacturing.

Barclays lost 6.1 percent to 168 pence (US$2.66). HSBC, the UK's largest bank, slid 2.6 percent to 742 pence.

Vodafone fell 6.9 percent to 110.9 pence, and Daimler declined 2.9 percent to 26.025 euros (US$33).

Rate cuts

The MSCI Asia Pacific excluding Japan Index rose 5.2 percent as South Korea pledged to pump US$10.8 billion into its economy and India cut interest rates to ease the fallout from the global credit crisis. Japanese markets are shut for a holiday.

Shares in emerging markets gained, extending last week's record 20-percent surge for the MSCI Emerging Markets Index. Even so, some money managers expect a record US$40 billion which has been pulled from emerging markets so far this year to grow further as economic growth deteriorates.

Even after last week's gains, European stocks are headed for their worst year on record as a jump in US mortgage defaults saddled global banks with more than US$684 billion of losses and caused credit markets to lock up.