European stock markets suffered sharp sell-offs on Thursday on news of greater-than-expected job losses in the United States that dampened prospects for a smooth recovery in the world's largest economy.

The London FTSE 100 index fell 2.45 percent to close at 4234.27 points while in Paris the Cac 40 lost 3.12 percent to end the session at 3116.41. The Frankfurt Dax plummeted 3.81 percent to 4718.49.

Elsewhere there were declines of 2.65 percent in Milan, 2.51 percent on the Swiss Market Index, 2.92 percent in Amsterdam and 1.73 percent in Brussels.

In Paris, fund manager Bertrand Lamielle of B*Capital, a unit of BNP Paribas bank, noted that "from March to May (when stock exchanges were rising) the markets were supported by confidence indicators."

"Today they want something concrete. Whenever the (macroeconomic) figures are disappointing, prices suffer."

The French auto sector was particularly hard hit on Thursday. Peugeot fell 5.42 percent to 18.05 euros while rival Renault fell 4.80 percent to close at 25.55 euros.

In the mining sector, likewise vulnerable to developments in the broader economy, ArcelorMittal gave up 4.76 percent to finish at 22.79 euros while Eramet lost 5.76 percent and closed at 185 euros.

Airline probe

In Frankfurt flag carrier Lufthansa fell 2.79 percent to 8.71 euros. The European Commission on Wednesday said it would open an investigation into Lufthansa's plans to acquire Austrian Airlines.

Analysts say the probe threatens the deal since Lufthansa could pull out if there is no approval by July 31.

Siemens meanwhile shed 5.34 percent to close at 47.50 euros following the announcement of an agreement with the World Bank to fight corruption.

Asian markets were mixed on Thursday ahead of the US jobs data, while another strong performance in Shanghai raised fears its rally will run out of steam.

Shanghai closed up 1.73 percent, its highest point in over a year, raising fears that the already hot market was due a correction.

Tokyo edged down 0.64 percent as investors turned cautious while Hong Kong lost 1.09 percent on a lack of firm buying signals.

AFP

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