The European markets fell for the second day on Monday, as banking stocks slipped after the bank of Spain took over the administration of regional savings bank Caja Castilla la Mancha and automotive stocks declined after the Obama administration rejected General Motors' and Chrysler's turnaround plans.

U.S. President Barack Obama said today that his administration has determined that the restructuring plans offered by GM and Chrysler do not go far enough to warrant additional government assistance. He noted that an organized bankruptcy could be the best option for the two ailing automakers.

Crude for May delivery fell $3.48 to $48.90 on the New York Mercantile Exchange, as unease about the global economy raised doubts about the global demand for energy.

The FTSEurofirst 300 index of pan-European blue chips closed 3.85% lower at 709.10 points, while the narrower DJ Stoxx 50 index fell 3.96% to 1,750.89 points.

Around Europe, the U.K.'s FTSE 100 index fell 3.49% to 3,762.91, while France's CAC 40 index slipped 4.27% to 2,719.34 and Germany's DAX index dropped 5.10% to 3,989.23.

Banco Santander, Spain's biggest lender, dropped 7.5%, as Spain mounted its first major bank rescue in 16 years, taking over Caja Castilla-La Mancha after efforts to choreograph its purchase by a rival lender failed. Two other Spanish banks Banco Popular and BBVA fell 4.4% and 7.7%, respectively.

UBS, Switzerland's largest bank, lost 10.8% after Swiss newspaper Sonntag said Sunday that UBS may cut 8,000 jobs and write down billions.

Deutsche Bank, Germany's largest bank, tumbled 11.9% and BNP Paribas, France's biggest lender, slid 9.6%.

Barclays, Britain's third largest bank, sank 14.2% following a report that it had opted not to take part in a government asset insurance scheme.

Shares of automakers fell after the Obama administration rejected General Motors' and Chrysler's turnaround plans. BMW, the world's biggest maker of luxury cars, slipped 7.5%, while Daimler, the second biggest, dropped 9.2% and Volkswagen, Europe's biggest carmaker, fell 5.4%. Peugeot, France's biggest carmaker, lost 9.2% and Renault, the second biggest, dipped 10.6%.

Mining stocks fell after copper prices retreated. BHP Billiton, the world's biggest miner, slipped 7.5%, while Anglo American, the second biggest, dropped 9.5% and Rio Tinto, the second biggest, fell 5.7%. Copper miner Antofagasta lost 7.3%.

Similarly, heavily weighted oil stocks lost ground after crude oil prices declined. BP, Europe's biggest oil company, fell 2.6%, while Royal/Dutch Shell, the second biggest, slipped 3.6% and Total, the third biggest, dropped 5.2%.

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