PARIS, Aug 10 (Reuters) - European stocks dropped 2.9 percent on Friday, turning negative on the year, as worries over the U.S. subprime mortgage market sent investors running for cover.
Banking stocks took a beating, with Royal Bank of Scotland down 3.9 percent, Barclays down 5.1 percent, ABN AMRO dropping 5 percent, and Credit Suisse falling 4.1 percent.
ABN was also hit by market talk that Fortis, part of a bidding consortium for ABN, may find it hard to finance its part of the deal.
At 1047 GMT, the pan-European FTSEurofirst 300 index was down 2.9 percent, at 1481.46, its lowest level since mid-March.
"Uncertainty in financial markets is increased by a lack of visibility," Tim Scholefield, head of equity at Baring Asset Management, wrote in a note.
"The financial instruments which are the source of concerns are typically not traded publicly, and with the result that information on pricing is opaque and often slow to emerge," he wrote.
Worries over the troubled U.S. subprime market intensified on Thursday, when French Bank BNP Paribas froze three funds that invested in U.S. subprime mortgages.
DWS, the mutual funds arm of Deutsche Bank, said on Friday its ABS fund, which invests in asset-backed securities, has currently assets under management totalling 2.1 billion euros ($2.88 billion), compared with 3 billion euros at the end of July. It said the fund remained open despite recent outflows.
U.S. stock futures pointed to a negative open on Wall Street.
