The European markets fell sharply on Thursday, as banking stocks tumbled amid worries about debt problem at the Dubai World and commodity stocks slipped after crude oil and metals prices dropped.
The Dubai government announced Wednesday that Dubai World intends to ask all providers of financing to Dubai World and its subsidiary Nakheel to 'standstill' and extend maturities until at least 30 May 2010.
Crude for January delivery fell $1.73 to $76.23 a barrel in electronic trading on the New York Mercantile Exchange, by the time the European markets closed, as uncertainty over demand continued.
The FTSEurofirst 300 index of pan-European blue chips closed 3.31% lower at 988.14 points, its lowest close in three weeks, while the narrower DJ Stoxx 50 index fell 3.22% to 2,440.23 points.
Around Europe, the U.K.'s FTSE 100 index fell 3.18% to 5,194.13, while France's CAC 40 index slipped 3.41% to 3,679.23 and Germany's DAX index dropped 3.25% to 5,614.17.
Trading on the London Stock Exchange was halted for more than three hours following a technical glitch. The U.S. markets are closed today for the Thanksgiving holiday.
Banks bore the brunt of sharp sell-off amid fears of potential exposure to Dubai debt. Royal Bank of Scotland, Britain's biggest government-controlled bank, dropped 7.8%, while BNP Paribas, France's largest bank, slipped 5.1% and Deutsche Bank, Germany's biggest lender, dipped 6.4%. HSBC, Europe's largest bank, lost 4.4%.
London Stock Exchange and Airbus parent EADS sank 7.4% and 4.3%, respectively, because of their exposure to Dubai.
Heavily weighted oil stocks lost ground after crude oil prices declined. BP, Europe's biggest oil company, slipped 2.7%, while Royal/Dutch Shell, the second biggest, and Total, the third biggest, both fell 2.4%.
Similarly, mining stocks slipped after metals prices retreated. BHP Billiton, the world's biggest miner, fell 4.2%, while Anglo American, the second biggest, slid 4.7% and Rio Tinto, the third biggest, dropped 4.8%. Copper miner Antofagasta lost 4.9%.
British insurer Legal & General tumbled 7.3% after Citigroup downgraded the stock to "sell" from "hold."
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.