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European Stocks Set to Tumble

European shares are set to open lower on Friday after equities fell overnight on concern about the fallout from the credit crunch, while Rio Tinto is reportedly mulling a counterbid for BHP Billiton.

Financial bookmakers in London expect the FTSE 100 index to open 30 to 36 points lower, Frankfurt's blue-chip DAX to open 52 to 68 points down and Paris' CAC-40 to fall 24 to 52 points at the start of trade.

"A lower opening is our best bet," said Heino Ruland, analyst at FrankfurtFinanz in a note. "Later on production and capacity utilisation in the U.S. will be on stage."

The FTSEurofirst 300 index of top European shares ended Thursday's session down 1.1 percent, putting the index on track for its third weekly successive decline, its worst performance in three months.

U.S. stocks fell as financial shares were rattled after Wells Fargo, second-largest U.S. mortgage lender, said the housing slump was far from over and was the worst since the Great Depression, which could see financial stocks come under pressure in Europe.

Mining stocks could get a boost from a report in The Wall Street Journal of Rio Tinto fighting off an unsolicited bid from BHP Billiton in a so-called "Pacman defence" counterbid. BHP Billiton has made an all-share takeover proposal worth about $140 billion for Rio.

Both Rio Tinto and BHP Billiton declined to comment on the report.

The European data calendar is virtually empty, leaving monthly U.S. industrial output and capacity utilisation figures for October as the highlight.