Heightened terror fears battered tourism sector stocks Tuesday, with airlines especially affected after Washington issued a travel warning and Turkey shot down a Russian warplane.
Shares in airlines as well as in travel and hotel groups slid after the United States issued a worldwide travel alert for its citizens on Monday.
Russia meanwhile confirmed that a warplane shot down by Turkey on the Syrian border was one of its fighter jets but insisted the plane had not violated Turkish airspace.
In Britain, budget airline Easyjet announced it had cancelled all flights to and from the Egyptian resort of Sharm el-Sheikh until next year over security concerns raised by the downing of a Russian airliner in Egypt last month. Russia last week said the plane was blown up in a "terrorist attack."
Brussels will meanwhile stay at the highest security threat level for another week over fears of an imminent terror attack, the Belgian government said.
"The heightened geopolitical threat from the Russian jet being downed by Turkey, while Brussels remains in lockdown, is sending people into safe havens like the yen and gold and out of travel-sensitive stocks," said Jasper Lawler, an analyst with traders CMC Markets.
"The rebound in the oil price is also a negative for fuel prices for airlines," he told AFP.
At around 1430 GMT, London's benchmark FTSE 100 index was down nearly 1.0 percent.
Frankfurt's DAX 30 and the CAC 40 in Paris both dropped nearly 2.0 percent compared with Monday's close.
In New York, US shares opened sharply lower Tuesday following Europe's stock slide on the downing of a Russian jet by Turkish forces.
In foreign exchange, the euro stood at $1.0658 as it extended its recovery from seven-month lows of under $1.06 on Monday.
On Tuesday, authorities in Belgium and France were hunting for Belgian-born Salah Abdeslam, a key suspect in the Paris attacks on November 13, when gunmen and suicide bombers killed 130 people.
Meanwhile "the shooting down of a Russian jet by Turkish forces, appears to have spooked the markets, with the European indices sharply widening their losses", noted Connor Campbell, financial analyst at Spreadex.
The incident is the first time a Russian military plane has been downed since Moscow began a bombing campaign on September 30 at the request of its long-standing ally Syrian President Bashar al-Assad.
Moscow's intervention in Syria has strained its relations with Turkey -- a fierce opponent of Assad -- with Ankara summoning Russia's ambassador last week after Moscow's warplanes bombed Syrian territory "very close" to the Turkish border.
Tuesday's developments sent shares sliding in afternoon trades. In London, Easyjet slumped 3.04 percent and British Airways' parent IAG lost 4.88 percent.
Elsewhere Tuesday, shares in German airline Lufthansa shed 3.53 percent and in Paris, French hotels group Accor sank by 6.88 percent in value compared with Monday's close.
Key figures around 1430 GMT
London - FTSE 100: DOWN 0.93 percent at 6,246 points
Frankfurt - DAX 30: DOWN 1.67 percent at 10,907
Paris - CAC 40: DOWN 1.97 percent at 4,792
EURO STOXX 50: DOWN 1.6 percent at 3,389
New York - Dow: DOWN 0.48 percent at 17,707
New York - S&P 500: DOWN 0.45 percent at 2,077
New York - Nasdaq: DOWN 0.45 percent at 5,079
Tokyo - Nikkei 225: UP 0.2 percent at 19,924 (close)
Euro/dollar: UP to $1.0658 from $1.0636 in late US trade on Monday
Dollar/yen: DOWN to 122.48 yen from 122.83 yen