(MENAFN- AFP) European stock markets tumbled Tuesday with carmakers and miners in freefall on the worsening Volkswagen scandal and a bleak outlook for China's economy, dealers said.
Frankfurt's benchmark DAX 30 index sank 3.80 percent to 9,570.66 points, with carmaker Volkswagen collapsing by a nearly fifth after revealing as many as 11 million diesel cars had been equipped with devices that could skew emissions data.
The Paris CAC 40 shed 3.42 percent to 4,428.51 points and London's FTSE 100 fell 2.83 percent to 5,935.84 points, with miners suffering sharp falls after the Asian Development Bank (ADB) slashed its growth forecasts for China.
"If a growth downgrade from the Asia Development Bank weren't bad enough for global stock markets, knocking the mining sector sharply lower on prolonged global growth fears in Asia, the auto sector has skidded into full reverse as Volkswagen's woes continue," Michael Hewson, analyst at traders CMC Markets analyst, told AFP.
VW issued a profits warning as concerns mounted "that the probe into VW's emissions deception might uncover much wider malpractice in the sector," said Hewson.
Reports said VW chief executive Martin Winterkorn could be forced out later this week by the company's supervisory board and the United States has opened a criminal probe.
VW shares plunged 19.82 percent to 106 euros as the group also set aside 6.5 billion euros ($7.3 billion) in provisions in the third quarter to cover potential costs arising from the scandal.
The troubled company -- whose stock had plunged 35 percent in two days and wiping out 25 billion euros in market capitalisation -- warned it would have to adjust its annual profit targets accordingly.
The enormity of Volkswagen's problems became more clear as it acknowledged 11 million diesel vehicles may have the pollution cheating device, much more than the half million for which US authorities could fine the carmaker up to $18 billion.
The fast-moving scandal sent rival European carmakers plunging on growing worries over the sector.
German carmakers BMW and Daimler sank by 6.02 percent and 7.02 percent to stand at 79.32 euros and 66.25 euros, respectively.
In Paris, French peers Peugeot shed 8.76 percent to 13.86 euros and Renault 7.12 percent to 66.55 euros.
Shares in Fiat Chrysler fell 6.21 percent to 11.93 euros on the Milan exchange, which fell 3.33 percent overall.
"It's an auto sector shaking incident that is the main contributor to Tuesday's bearish trading -- and something that looks like it could rumble on for some time," said Connor Campbell, analyst at dealers Spreadex.
- Growth worries hit miners -
Mining companies were also among the heaviest fallers after the ADB forecast Asian growth would hit 5.8 percent this year and 6.0 percent in 2016. March's forecast was for 6.3 percent for both years.
It tipped China -- the main driver of global economic growth -- to expand by 6.8 percent this year. That was downgraded from 7.2 percent after a stream of weak indicators including on trade, inflation, investment and consumer spending.
The news weighed heavily on mining and metal groups around Europe because China is a major consumer of commodities such as copper and gold.
In London, mining giant Glencore saw its share price nosedive 10.63 percent to 106.35 pence, topping the FTSE 100 fallers' board.
Anglo American dropped 6.73 percent to 648.10 pence and Antofagasta shed 7.25 percent to 524.50 pence.
In Amsterdam, shares in ArcelorMittal -- the world's biggest steelmaker -- lost a hefty 5.92 percent to 5.46 euros.
Steel group Thyssenkrupp shed 4.8 percent to 16.26 euros in Frankfurt.
In foreign exchange activity on Tuesday, the European single currency slid to $1.135 from $1.1195 late in New York on Monday, as the dollar received support by US officials talking up chances of an interest rate hike later this year.
That talk hit emerging market currencies in Asia, but the region's stocks fared better.
Sydney ended 0.74 percent higher and Seoul closed up 0.88 percent. Hong Kong added 0.18 percent and Shanghai finished up 0.92 percent.
But US stocks followed Europe's lead, with the Dow Jones Industrial Average sliding 1.64 percent to stand at 16,240.1 points in midday trading.
The broad-based S&P 500 fell 1.63 percent to 1,934.88, while the tech-rich Nasdaq Composite Index dropped 2.05 percent to 4,730.09 points.
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