European stocks sank the most in 18 months after Federal Reserve Chairman Ben S. Bernanke said the central bank may end bond purchases next year if the economy strengthens in line with forecasts.

The Stoxx Europe 600 Index (SXXP) plunged 2.8 percent to 284.22 as of 4:32 p.m. in London, the biggest retreat since Nov. 21, 2011. The benchmark measure has declined 8.5 percent since May 22, when Bernanke indicated the central bank could pare stimulus measures as the economy grows. The U.S. jobless rate will fall as low as 6.5 percent next year from 7.6 percent in May, the Fed forecast yesterday.

National benchmark indexes fell in every western European market except Iceland.

FTSE 100 6,159.51 -189.31 -2.98% CAC 40 3,698.93 -140.41 -3.66% DAX 7,928.48 -268.60 -3.28%

China's benchmark money-market rates climbed to records today as the People's Bank of China refrained from using reverse-repurchase agreements to address a cash crunch. The seven-day repurchase rate rose 2.7 percentage points to 10.77 percent in Shanghai, according to a daily fixing announced by the National Interbank Funding Center, the highest in data going back to March 2003.

The Fed will probably taper its stimulus measures later in 2013 and halt bond purchases around mid-2014 as long as the world's largest economy performs in line with its projections, Bernanke told reporters yesterday in Washington after a two-day meeting of the Federal Open Market Committee.

The central bank said it will keep buying bonds at a pace of $85 billion a month, and repeated that it's prepared to increase or reduce the pace of purchases depending on the outlook for the job market and inflation.

Rio Tinto and BHP Billiton Ltd. (BLT), the world's largest mining companies, lost 4.8 percent to 2,667 pence and 5.1 percent to 1,720 pence, respectively.

The preliminary reading of a Chinese purchasing managers' index for June released today by HSBC Holdings Plc and Markit Economics was 48.3, missing economists' estimates of 49.1. A number below 50 indicates contraction.

Randgold Resources Ltd. tumbled 7.3 percent to 4,304 pence as gold slid to the lowest since 2010. Polymetal International Plc, a Russian gold and silver producer, sank 12 percent to 541.5 pence, the lowest price since it sold shares in London in October 2011.

Swatch, the biggest maker of Swiss watches, and Cie. Financiere Richemont SA, owner of the Cartier brand, fell 5.5 percent to 505 francs and 5.5 percent to 80.45 francs, respectively. Watch exports declined 3.9 percent in May from a year earlier, the Federation of the Swiss Watch Industry said.

Eurotunnel, operator of the Channel Tunnel between Britain and France, plunged 12 percent to 5.51 euros. Les Echos reported the European Commission will demand toll reductions as freight and passenger rates are seen as excessive.

Aberdeen Asset Management Plc (ADN), Scotland's largest money manager, lost 8.3 percent to 366.9 pence as Goldman Sachs Group Inc. downgraded the stock to neutral from buy.

Ashtead Group Plc, the U.K. equipment-rental company, rose 4.5 percent to 655 pence, gaining for a fifth day, after posting earnings that beat estimates and raising its dividend.

U.S. stock futures fell as global equities tumbled after the Federal Reserve said it may start paring stimulus measures later this year and China's cash crunch worsened.

Global Stock:

Nikkei 13,014.58 -230.64 -1.74%

Hang Seng 20,382.87 -604.02 -2.88%

Shanghai Composite 2,084.02 -59.43 -2.77%

FTSE 6,206.03 -142.79 -2.25%

CAC 3,740.95 -98.39 -2.56%

DAX 7,991.77 -205.31 -2.50%

Crude oil $96.81 -1.46%

Gold $1296.60 -5.63%

Upgrades:

Hewlett-Packard (HPQ) upgraded to Outperform from Market Perform at Wells Fargo

Wal-Mart (WMT) upgraded to Outperform from Mkt Perform at Raymond James

Downgrades:

Walt Disney (DIS) downgraded to Neutral from Buy at Goldman

Other:

European stocks sank after Federal Reserve Chairman Ben S. Bernanke said the bank may end bond purchases next year if the economy strengthens in line with forecasts. U.S. index futures and Asian shares slid.

The Fed will probably taper its stimulus measures later in 2013 and halt bond purchases around mid-2014 as long as the world's largest economy performs in line with Fed projections, Bernanke told reporters yesterday in Washington after a two-day meeting of the Federal Open Market Committee.

The central bank said it will keep buying bonds at a pace of $85 billion a month, and repeated that it's prepared to increase or reduce the pace of purchases depending on the outlook for the job market and inflation.

A gauge of basic-resources shares was the worst performer on the Stoxx 600. Rio Tinto and BHP Billiton Ltd., the world's largest mining companies, lost 4.5 percent to 2,675 pence and 3.8 percent to 1,744 pence, respectively.

The preliminary reading of a Chinese purchasing managers' index for June released today by HSBC Holdings Plc and Markit Economics was 48.3, missing economists' estimates of 49.1. A number below 50 indicates contraction.

Randgold Resources Ltd. tumbled 5.9 percent to 4,372 pence as gold slid to the lowest since January 2011. Polymetal International Plc, a Russian gold and silver producer, slid 4.5 percent to 587 pence.

Swatch and Cie. Financiere Richemont SA fell 3.7 percent to 514.50 Swiss francs and 3.3 percent to 82.30 francs, respectively. Swiss watch exports fell 3.9 percent in May from a year earlier, the Federation of the Swiss Watch Industry said.

FTSE 100 6,203.63 -145.19 -2.29%

CAC 40 3,745.69 -93.65 -2.44%

DAX7,999.33 -197.75 -2.41%

Nikkei 225 13,245.22 +237.94 +1.83%

Hang Seng 21,083.25 -142.63 -0.67%

S&P/ASX 200 4,861.4 +47.05 +0.98%

Shanghai Composite 2,143.45 -15.84 -0.73%

FTSE 100 6,348.82 -25.39 -0.40%

CAC 40 3,839.34 -21.21 -0.55%

DAX 8,197.08 -32.43 -0.39%

Dow -206.04 15,112.19 -1.35%

Nasdaq -38.98 3,443.20 -1.12%

S&P -22.88 1,628.93 -1.39%