* MSCI world equity index drops 1.44 pct to 193.91
* European stocks hit 6-year lows, U.S. stock futures down
* Euro falls, euro zone services PMI at record low
By Carolyn Cohn
LONDON, Feb 20 (Reuters) - European stocks hit 6-year lows,
U.S. stock futures indicated a lower open on Wall Street and the
euro fell on Friday on concern about the state of the U.S. and
European banking sector.
Banking stocks led the decline, including U.S. banks
Citigroup <C.N> and Bank of America <BAC.N> listed in Frankfurt,
on worries that these and other European banks could be
nationalised.
The level of exposure of western European banks to eastern
European economies also weighed on banking stocks and the euro,
while a record low reading in the February euro zone flash
services purchasing managers' report boosted euro zone
government bonds.
"We're near the cliff's edge, very close to capitulation,
the mood is very gloomy," said Jean-Claude Petit, head of
equities at Barclays Wealth Managers France.
"I'm not sure that governments and central banks are
realising what's really going on. The gaffes made by west
European banks in east Europe revealed recently are having a
devastating effect on the market."
The FTSEurofirst 300 index of leading European shares
<> hit a six-year low of 739.12, down more than 2.5
percent. The MSCI world equity index <.MIWD00000PUS> hit its
weakest since Nov. 21, down nearly 1.5 percent, and U.S. stock
futures <SPc1><DJc1><NDc1> all fell more than 1 percent.
Benchmark emerging equities <.MSCIEF> dropped 2.8 percent to
one-month lows.
Reflecting the downbeat global mood, Japan's central bank
said on Friday that a deterioration in corporate profits had
gathered pace.
"It looks like the tentative signs of stabilisation that we
had witnessed in January seem to have dissipated so far this
month, suggesting that the worst may not be over yet," said
analysts at Goldman Sachs in a client note.
The euro dropped 0.3 percent against the dollar <EUR=> and
0.5 percent against the yen <EURJPY=>, although it recouped
earlier steeper losses, and euro zone government bond futures
<FGBLc1> rose 59 ticks.
Safe havens were in vogue, with spot gold prices climbing
above $993 an ounce, the highest since July. Analysts say the
$1,000 barrier will be breached soon.
Oil <CLc1> fell more than $1 below $38 a barrel on the
deteriorating global outlook, after posting a 14 percent gain on
Thursday, the biggest settlement gain this year.
(Additional reporting by Blaise Robinson in Paris; editing
by David Stamp)
