(MENAFN- AFP) European stocks closed mixed on Thursday, with German shares staging a late comeback after fears the eurozone could be heading toward a fresh crisis spread turmoil through markets for much of the day.
London's benchmark FTSE 100 index ended down 0.25 percent at 6,195.91 points, while in Paris, the CAC 40 lost 0.54 percent to 3,918.62 points.
Meanwhile Frankfurt's DAX index added 0.13 percent compared with Wednesday's closing level to 8,582.90 points.
European shares stabilised towards the close after a rollercoaster session saw already jittery investors spooked by fresh signs of weakness in the eurozone's economy.
"A combination of factors ensured the perfect storm that has been brewing since the start of the week continued to rage on in full force," said Kash Kamal, an analyst at Sucden Financial.
"Worries regarding the political stability in Greece and its already fragile bailout plan combined with the slowing growth outlook across the eurozone after weaker than expected macro data... have seen a protracted sell-off across the majority of risk assets."
Investors were gripped by panic after weak eurozone inflation data, poor demand at a Spanish bond auction and fears that Greece could be set for a fresh financial crisis when it exits its bailout plan sent fresh tremors through already jittery financial markets.
Indexes around Europe dropped more than three percent after the EU and ECB scrambled to promise Greece that its banks would still have Brussels' support when it leaves its debt-rescue programme.
Adding to the fears were worries that the Ebola outbreak in west Africa could start to spin out of control.
Greece's Finance Minister Guikas Hardouvelis said on Thursday that the market turmoil "does not reflect the position or prospects of the Greek economy".
The selloff continued on Wall Street, with US shares continuing the sharp spiral lower sparked by weak retail sales data the day before.
In mid-afternoon trading the Dow Jones Industrial Average stood at 16,072.03, down 0.43 percent from Wednesday's close.
The broad-based S&P 500 sank 0.47 percent to 1,853.72 points, while the tech-rich Nasdaq Composite Index fell 0.61 percent to 4,189.78 points.
- Eurozone outlook darkens -
Eurozone exports fell for the third month running in August, dropping 0.9 percent in the latest sign of economic weakness, official data showed.
Inflation in the eurozone had dipped to 0.3 percent in September, the lowest level since financial debt crisis in 2009, separate figures confirmed.
The data adds to concern that the eurozone could slip into a dangerous spiral of deflation, which stifles economic growth and could hurt many of the bloc's already cash-strapped governments.
Weak eurozone economies such as Portugal and Greece saw their bonds fall as investors feared they could once again sink into financial crisis, while even fast-growing Spain saw demand for its debt drop.
"It looks increasingly likely that Germany, the bloc's powerhouse economy, will slip back into recession, and the risk of deflation looms ever larger," said economist Ben Brettell at brokerage Hargreaves Lansdown.
All this comes in a climate of new tension over eurozone national budgets, notably in debt-laden France and Italy.
Pushing his case for a shift away from austerity in EU economic policy, French President Francois Hollande put the slump in global markets down to stagnating growth in the eurozone.
"The United States is slowing down, Europe has not found a way back to growth, which is what I am fighting about," he said.
- Oil prices tumble -
The selloff also hit oil prices, which slumped due to concerns over the health of the world economy and news of higher-than-expected stockpiles in the world's top consumer, the United States.
"With investors continuing to find shelter under the safe-haven of the dollar, commodity prices slid further, which is not good news for the bottom lines of companies like Royal Dutch Shell and BP," said Tony Cross at Trustnet Direct.
Crude briefly fell below $80 a barrel in New York, while in Europe, Brent hit a fresh four-year low of $82.66.
Sentiment was also rocked this week by investor concerns over the Ebola epidemic in west Africa.
"The big worry is that Ebola is going to bring in a level of uncertainty that's never been seen before in the markets, and the markets don't know how to price uncertainty," said Joe Rundle, head of trading at ETX Capital.
The fierce selloff continued in Asia on Thursday, led by Tokyo, with investors worried that economic slowdown in China, Europe and Japan is now hitting the United States.
In London, shares in Shire Pharmaceuticals plunged by another 7.3 percent after US drugs giant AbbVie announced that its board would no longer recommend a $54-billion takeover.
The European single currency nudged lower to $1.2803, from $1.2834 late in New York on Wednesday. The ruble fell to another record low against the euro.
Bond yields for eurozone periphery countries shot up in the secondary markets, with Portugal rising to 3.585 percent from 3.286 percent, while Italy climbed to 2.665 percent from 2.422 percent.
Yields on 10-year bonds from Greece jumped to 8.656 percent from 7.854 percent.
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