European stocks plunge

European stock markets have taken another dive, more than 5 per cent, as equities succumbed to a deluge of bad economic data pointing to a severe global slowdown.

In London, the FTSE 100 fell 5.19 percent to 4,065.49 points, in Paris the CAC 40 lost 5.60 percent to 3,079.89 points, while in Frankfurt the DAX shed 5.88 percent to 4,394.79 points.

An analyst at brokerage Tullett Prebon in London said economic growth figures have outlined the worst global recession since at least the 1980s, while gauges of inflation expectation point to growing deflation fears across the G7.

In northern Europe, Norway's main index lost 7.78 percent, Finland's market fell 6.65 percent and Swedish equities plummeted 5.40 percent.

In southern Europe, the leading index on the Milan stock market, the SP/Mib, plunged 6.25 percent to 18,736 points.

Meanwhile Germany's DAX index lost 5.32 per cent to 4,420.99.

The DAX had been losing ground throughout the day and fell further after US stocks dropped sharply at the opening in New York as traders locked in gains from a stunning series of rallies in the past week as fresh recession jitters emerged.

Signs point to recession

A new set of grim figures revealed a deepening recession widening in Europe.

In China, manufacturing activity hit a three year low in November, showing how the crisis spread from its source in the US and Europe to powerhouse emerging markets.

The purchasing managers' index (PMI) dropped to 38.8 percent in November, down from 44.6 percent in October and the lowest since the government introduced the survey in 2005, said the official Xinhua news agency.

Meanwhile, India's exports in October tumbled for the first time in three years, hit by slumping demand in its key US and European markets.

Exports fell by 12 percent from the same month a year earlier to 12.8 billion dollars as demand shrank, according to government figures.