European markets drop after Nikkei slump [October 16 2008]

European stock markets were lower Thursday after Japan's Nikkei tumbled more than 11 percent overnight amid mounting anxiety that the world economy is plunging into a deep and protracted recession.

The latest bout of selling in the markets was stoked by a record percentage fall on Wall Street Wednesday after weaker-than-expected U.S. retail sales data and a downbeat assessment from the U.S. Federal Reserve indicated that the world's largest economy is already, or about to fall, into recession.

"Once again a market rally is brought to a juddering halt by dramatic falls across global markets," said Matt Buckland, a dealer at CMC Markets. "The persistent fear of a global recession shrugged off the cheer about banking rescue plans in the previous session with the Dow down 7.9 percent and the S&P500 off 9 percent, their worst one-day percentage falls since 1987, as U.S. retail sales were weaker than expected and the Fed's Beige Book showed weakening economic activity across the country," he added.

The FTSE 100 index of leading British shares was down 114.03 points, or 2.8 percent, at 3,965.56, while Germany's DAX was 121.13 points, or 2.5 percent, down at 4,750.50. The CAC-40 in France was 113.04 points lower, at 3.3 percent, at 3,268.03.