Shares fall as fears of a Eurozone collapse mounts

Thursday: European stocks slumped  after the US Federal Reserve disappointed investors with its stimulus plans and warned of serious downside risks amid the stubborn eurozone debt crisis. Announcements made by the IMF have also made matters worse.

Markets were also rocked by news that Chinese manufacturing had contracted for the third straight month in September, fanning fears over the plight of the global economy. The IMF, Wednesday clipped 1.5% off China's growth.

London's FTSE 100 index of leading shares tumbled 3.54 percent to 5,101.21 points wiping off £64bn .

Frankfurt's DAX 30 recoiled 3.53 percent to 5,238.49 points and in Paris the CAC 40 shed 4.07 percent to 2,816.20.

Milan slid 3.01 percent and Madrid tumbled by 3.64 percent on persistent concern that Italy and Spain could fall victim to the fast-moving eurozone crisis.

In foreign exchange deals, the European single currency sank to $1.3506, and struck a new 10-year low against the yen as investors sought the safe-haven Japanese currency.

At about 0915 GMT, the euro dived to 103.14 yen, hitting the lowest level since June 2001. The IMF has warned that there is worse to come.