( dpa ) - Share prices slumped across Europe on Tuesday amid a new round of fears about the state of the US economy.
Markets fell sharply after Wall Street opened lower, following the release of data showing a contraction in the US service sector for the first time in five years.
Europe's blue-chip Stoxx 50 index closed down 3 per cent at 3,203, Germany's DAX lost 3.4 per cent to end the day at 6,765 and Paris' CAAC was down nearly 4 per cent to 4,776.
As trading drew to a close, Europe's premier stock market, London's FT-100, was down 2.63 per cent to 5,868.
New York's Dow Jones Index fell 1.8 per cent to 12,409 during morning trading after the US index of business activity in the non-manufacturing sector dipped to 41.9 from 54.4 in December, well below economists' expectations.
Coming amid the corporate reporting season, analysts said the latest economic data points to the US housing crisis spreading to the wider economy.
Underscoring the renewed concerns about the outlook for the US economy, the oil price dropped 1.5 per cent to 88.75 dollars a barrel in European trading on Tuesday.