Frankfurt DAX: Germany's DAX index threatened to break key support pegged at 5000 points as investors pulled out of banking stocks plagued by Russia's financial crisis.

The Dax index eventually ended the day 3.26 per cent lower as banks were hit by worries about their exposure to Russian debt. Vereinsbank ended 10.33 per cent lower, Hypobank fell 9.75 per cent while Deutsche Bank, Commerzbank and Dresdner Bank were all hit. The Xetra Dax, which measures all-day computer trading, closed 4.48 per cent lower at a four-month low of 5012.73 points.

Paris CAC-40:

French shares posted their biggest one-day drop in nearly six years, falling by 4.28 per cent as investors took fright over Russia's political and economic disarray. Despite the Russian storm, traders said economic fundamentals in France appeared sound, benefiting from a low interest-rate environment while French companies have less direct exposure to Russia than German firms and banks.

French car-makers Renault and PSA Peugeot Citroen suffered heavily, falling by 7.38 per cent and 5.86 per cent respectively. Among the banks, CCF dropped 6.03 per cent and BNP fell 5.36 per cent. Other heavy fallers included France Telecom, which dropped by 6.5 per cent and Alcatel, down 7.68 per cent. Both stocks have enjoyed good climbs of late.

Milan Mibtel:

Italian shares slipped with other European stocks, losing more than 4 per cent to close just above the session lows.

Even Olivetti, the most traded stock and a recent outperformer, turned down at the close and ended 4.26 per cent weaker at 4,160 lire. In the banking sector, Commerciale Italiana was one of the biggest losers, falling 8.24 per cent to 11,820 lire. It is one of Italy's most globally exposed banks, particularly in Latin America. Dealers said the stock had been doubly hit after being heavily bought in recent weeks on renewed hopes of a merger with Banca di Roma. Fiat, which is involved in Russia, fell 6.64 per cent.