Europe's main stock markets fell sharply on Monday after earlier losses in Asia, as investors worried about possible recession and a forthcoming interest rate call in the United States, analysts said.
The Paris market remained on edged after an alleged seven-billion-dollar fraud was unearthed last week at French bank Societe Generale.
In France, the CAC 40 index of leading shares dived 1.22 percent to 4,818.69 points, Germany's DAX 30 tumbled 1.41 percent to 6,720.82 and Britain's FTSE 100 shed 1.08 percent to 5,805.40 points.
The Euro Stoxx 50 index of leading eurozone shares fell 1.58 per cent to reach 3,717.47.
The European single currency stood at 1.4712 dollars. "Recent volatility continues with worries over US recession weighting," said one London based trader.
"The focus today (Monday) is clearly on the reaction of European markets to weakness in Asia overnight, and all eyes will turn towards Wednesday evening's Fed rate decision."
World equities were battered last week by persistent fears about the health of the global financial sector after it emerged that Societe Generale had a deep hole in its accounts attributed to fraudulent dealing by a lone trader.
On Monday, the share price of Societe Generale dived 4.09 percent to 70.85 euros in Paris trade.
Elsewhere, traders are awaiting an all-important interest rate decision from the US Federal Reserve on Wednesday.
In an emergency move last week, the Fed slashed American borrowing costs by 0.75 percentage points to 3.50 percent in a bid to soothe slumping world stock markets and US economic concerns.
The Fed is widely expected to trim borrowing costs again at an upcoming meeting as insurance against a possible economic calamity, analysts said.