Share prices plunged over 3.6 percent Wednesday on the Paris Stock Exchange amid nervousness ahead of budget submissions to European Union authorities this week.
France is viewed as in a difficult position to meet EU-set targets for public spending and permissible deficits and Brussels could send the French budget back for revision.
Under EU regulations, member deficits must not exceed 3.0 percent of Gross Domestic Product and France is hovering around the 4.0 percent mark for some time.
The market reflected this nervousness and also a tense international situation with International Monetary Fund (IMF) forecasts warning the world crises would negatively affect trade and growth.
The CAC 40 index of "Blue Chip" shares plummeted 3.63 percent to close at 3,939.72 points, the lowest level since mid-2011, traders at Boursorama Brokerage said.
And volume was sustained and active as operators relinquished positions, the traders said.
Trading volume was just under 6.0 billion Euros (USD 7.5 billion), Boursorama indicated.
The CAC 40 preference share index has now lost over 11.0 percent in a month and has retreated by over 8.0 percent since January 1, 2014.
Big losers on Wednesday, included banks, insurance and industrial shares, led by Alcatel-Lucent, down 6.3 percent, Credit Agricole, off 5.45 percent, GDF Suez, 5.42 percent lower, while AXA, Societe General, Vinci, Airbus and BNP Parisbas were all down by around 5.0 percent.
Meanwhile, the Euro gained ground against the USD, trading up 1.00 percent at USD 1.2786.