Europe's top stocks plunged to new six-year lows today as investors worried by the stand-off in Iraq headed for the exits.
London's FTSE and Frankfurt's blue-chip DAX were among the hardest hit, both dropping more than four per cent. The London benchmark index fell up to five per cent in one of its biggest percentage drops in the history of the index.
"There's one word for it - carnage. It's horrible," said Mr Richard Wright, head of CFD at brokerage GNI in London.
"Nobody has any confidence. Nobody wants to buy anything and if they do buy anything they're wrong within about 10 minutes. It's fairly gloomy," said Mr Wright.
French utility Suez topped the blue-chip loser-board on concerns it may be facing a cash crunch, while German drugs and chemical firm Bayer tumbled after it announced it was being sued over alleged securities violations.
Traders blamed the dire mood on uncertainty about Iraq, withering confidence in the corporate sector and a sluggish world economy - a litany of woes that has tugged the FTSE Eurotop 300 index down 20 percent so far this year.
With only Frankfurt still trading, the Eurotop 300 index was down 3.5 per cent at a new six-year low - as losers eclipsed gainers by six-to-one. Volume was above average at 3.2 billion shares.
In New York, the Dow Jones industrial average fell 0.8 per cent and the Nasdaq shed 0.8 per cent as investors worried about Iraq.
The market drew brief respite from rumours, quickly denied by US government officials, that Al Qaeda leader Osama bin Laden had been captured. But the main focus remained on how the world's major powers will resolve the impasse on how to disarm Iraq.
"It increasingly seems that the US is going to go it alone, which is the least desirable outcome," said Mr Rupert Thompson, global strategist at independent brokerage E*Trade.