Jan. 28 (Bloomberg) -- European stocks retreated, led by commodity producers and banks, on growing concern global economic growth is slowing and companies may report more losses linked to subprime mortgages.

Antofagasta Plc and Total SA followed metals and oil prices lower, while Lafarge SA and Holcim Ltd. led declines by cement makers after Credit Suisse Group advised selling the shares on prospects for a slowdown. Barclays Plc and Royal Bank of Scotland Group Plc slid as Dresdner Kleinwort predicted more writedowns. Societe Generale SA, which last week said it suffered the biggest trading fraud in banking history, sank to a three-year low.

The Dow Jones Stoxx 600 Index fell 1.2 percent to 318.23 at 4:30 p.m. in London. The index has been whipsawed this month, posting its biggest loss since the Sept. 11 terrorist attacks on Jan. 21 and its biggest gain since 2003 on Jan. 24. The Jan. 21 slump pushed the index into a bear market -- commonly defined as a 20 percent decline in a 12-month period.

``What's worrying us is the specter of a recession,'' said Emmanuel Soupre, who helps oversee about $15.6 billion at Neuflize Gestion in Paris. ``A few weeks ago, no one was capable of determining whether we were facing a slowdown or a recession. The more time passes, the more the ghost of a recession appears. We're convinced stocks can fall further.''

National benchmarks retreated in 13 of the 18 western European markets. France's CAC 40 slid 0.6 percent. The U.K.'s FTSE 100 lost 1.4 percent, and Germany's DAX gained less than 0.1 percent. The Stoxx 50 decreased 1.2 percent, and the Euro Stoxx 50, a measure for the euro region, slipped 0.5 percent.

Antofagasta, Lafarge

``This isn't the time to go into the market,'' said William de Vijlder, chief investment officer at Fortis Investment Management in Brussels, which oversees $191 billion. ``We'll still see a lot of volatility.''

Antofagasta, the copper producer controlled by Chile's Luksic family, retreated 4.6 percent to 622 pence. Anglo American Plc, the world's second-largest mining company, sank 5.2 percent to 2,456 pence. Total, Europe's biggest oil refiner, tumbled 2.7 percent to 48.64 euros.

Copper fell as much as 2.1 percent in New York on concern an economic slowdown will reduce the demand for the industrial metal. Crude oil declined from a one-week high in New York.

Lafarge, the world's biggest cement maker, lost 5.5 percent to 106.28 euros. Holcim, the second-largest, slipped 4.3 percent to 103 francs.

Credit Suisse downgraded Lafarge to ``underperform'' from ``outperform,'' and Holcim to ``underperform'' from ``neutral,'' citing the possibility of a slowdown in emerging markets and less power to set prices as new cement capacity comes on stream in the next three years.

Barclays

Barclays, the U.K.'s third-biggest bank, slipped 2 percent to 478 pence. Royal Bank of Scotland, the second-largest, slid 3.1 percent to 378.75 pence.

``We expect to see larger writedowns than already announced, with Barclays and RBS most at risk,'' Dresdner wrote in a note. ``2008 looks set to be a tough year.''

Banks and insurers have led the Stoxx 600 to a 21 percent drop since June 1 as financial companies reported more than $133 billion in losses from credit investments that failed. Banks may require another $143 billion should credit-rating firms downgrade bond insurers, analysts at Barclays Capital said Jan. 25.

Irish banks including Allied Irish Banks Plc fell after UBS AG cut its ratings on the country's largest lenders, citing the impact of cooling economic growth on the commercial property market. Allied Irish, Ireland's biggest bank by market value, dropped 4.9 percent to 15.14 euros. Anglo Irish Bank Plc fell 6.1 percent to 9.22 euros.

Irish Banks

Allied Irish and Anglo Irish were cut to ``sell'' from ``neutral'' by analysts including Ross Curran in London.

Bankers meeting at the Swiss ski resort of Davos said there are increasing risks of a global recession, while manufacturers countered that they have yet to feel it in their business.

Economists at Goldman, Sachs & Co., Morgan Stanley and Merrill Lynch & Co. project the U.S. will this year suffer its first recession since 2001. Michael Dell, chief executive officer of Dell Inc., the world's second-largest maker of personal computers, said there's no reason ``to get in a panic.''

Societe Generale slid 5.9 percent to 69.53 euros, the lowest since August 2004. The French bank that last week said it suffered the biggest trading fraud in banking history, was cut to ``sell' from ``buy'' at Citigroup Inc. France's second-biggest bank by market value has been ``severely impaired'' by the 4.9 billion-euro ($7.2 billion) loss caused by a rogue trader, Citigroup said.

Cutting Estimate

The brokerage cut its price estimate on the shares to 65 euros from 130 euros apiece, implying a possible decline of 12 percent from current levels.

U.K. homebuilders retreated after a report said that the country's housing market will stagnate. U.K. home prices probably won't pick up until mid-2009, according to Instant Access Group, the country's biggest property-investment club.

Barratt Developments Plc, the U.K.'s second-largest house builder by volume, sank 6.8 percent to 425.75 pence. Bellway Plc, a U.K. homebuilder aimed at first-time buyers, dropped 3.6 percent to 820.5 pence. Bovis Homes Group Plc, the U.K.'s most profitable house builder, declined 4.3 percent to 606.5 pence.

Nokia Oyj slid 3.5 percent to 23.36 euros. Morgan Stanley lowered its share-price estimate for the world's largest mobile- phone maker to 27 euros from 30. ``The one risk we see is a meaningful slowdown in Europe, which accounts for a quarter of volume,'' London-based analyst Adnaan Ahmad wrote in a note.

Fortis Rebounds

Fortis climbed 7.5 percent to 14.26 euros. Belgium's biggest financial-services company said yesterday it meets capital and solvency requirements even when its holdings in subprime collateralized debt obligations are valued under ``very stringent scenarios.''

The shares tumbled 10 percent Jan. 25 on concern the Brussels-based company would have to sell new shares to strengthen its capital, traders said. ING Groep NV, the largest Dutch financial-services company, rose 1.6 percent to 21.95 euros.

``There's a lot of nervousness and volatility in the market,'' said Chicuong Dang, an analyst at Richelieu Finance in Paris. ``There are still fears of writedowns by banks.''

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

Last Updated: January 28, 2008 11:44 EST