Stocks fell sharply in early trade this morning on worries over the impact of the deterioration in the US subprime mortage sector.
Earlier today, the pan-European FTSEurofirst 300 index was down 1.7 per cent at 1,498.00, after losing more than 2 per cent shortly after the open. The benchmark index, which lost 1.8 per cent yesterday, is now up just 1 per cent on the year.
Banks were leading the fall, with Royal Bank of Scotland down 4.5 per cent and Barclays down 5 per cent.
The FTSE 100 index dropped 1.7 per cent, turning negative on the year for the first time since 2002. Germany's DAX index lost 1.9 per cent, and France's CAC 40, which is also negative on the year, dropped 1.7 per cent.
Elsewhere, Tokyo's Nikkei average fell more than 2 per cent to its lowest close in almost five months today. Concerns about spreading US subprime mortgage woes sparked selling of financial stocks and prompted investors to take profits in shipping firms and other recent gainers.
The selling spread across the board, with the benchmark down more than 8 per cent from this year's peak marked in late February.
The Nikkei ended the day down 406.51 points or 2.37 per cent at 16,764.09, the lowest close since March 16th. The broader Topix index tumbled 2.96 per cent to 1,633.93.
Meanwhile, the European Central Bank said it would add money through the weekend to calm markets, while central banks in Asia joined a global campaign by monetary authorities to inject extra cash into banking systems. The Swiss central bank also offered money at below-market rates.