Europe's stock markets plunged after investors appeared disappointed at the limited extent of the European Central Bank's statement on monetary policy on Thursday.
By late-afternoon European trading, the CAC 40 in Paris sank 2.02 percent before recovering slightly to a drop of 1.75 percent to 4,289.06.
London's FTSE 100 index dropped 0.90 percent to 6,498.76 points, the CAC 40 in Paris shed 0.75 percent to 4,332.30, while Frankfurt's DAX 30 index fell 1.11 percent to 9,277.75 points compared with Wednesday's close.
And in Milan the market fell sharply 3.30 percent to 20,023 points on deflation fears.
The ECB on Thursday left its key interest rates unchanged, holding its main "refinancing" rate steady at 0.05 percent after cutting it last month.
The bank also announced that it will start covered bond and asset-backed security (ABS) purchases, aimed at injecting cash into the eurozeon economy.
But for investors, "it did not deliver a single big number and did not go beyond the September announcements," said Berenberg senior economist Christian Schulz.
Wall Street opened mixed on Thursday, the day after heavy losses triggered by the Commerce Department said construction spending in August fell unexpectedly, while a separate report showed manufacturing activity slowed in September.
The Dow Jones was off 0.03 percent at 16,799.31 while the tech-rich Nasdaq Composite Indes was up a slight 0.04 percent to 4,423.65.
The euro edged up to $1.2674 from $1.2624 late on Wednesday, having struck a two-year low of $1.2571 earlier this week on hopes of more ECB stimulus.
France obtained a record low interest rate of 1.23 percent for an issue of 10-year bonds. Spain also placed long-term and medium-term debt at low rates.
- ECB stimulus news -
Dangerously low eurozone inflation had sparked intense speculation that the ECB could inject more stimulus to fight the threat of deflation -- a vicious downward spiral of falling prices and demand which central banks have great difficulty reversing.
Markets had not been convinced that the ECB would take action even though "the eurozone economy is on its knees," said Valutrades analyst Joao Monteiro.
ECB president Mario Draghi told a news conference in Naples, where the central bank's meeting was held, that the bank will "start purchasing covered bonds and asset-backed securities (ABSs)in the fourth quarter of 2014, starting with covered bonds in the second half of October."
New data showed this week that eurozone inflation slowed in September to 0.3 percent, the lowest level for nearly five years. That, together with weak eurozone manufacturing data, had turned up the pressure for more ECB action.
Draghi also stressed that the eurozone countries must push the legislation and implementation of structural reforms to steer the single currency bloc back to growth.
- Ebola fears hit airlines -
Meanwhile airline stocks were under pressure again Thursday "in the wake of news that the Ebola virus continues to spread," added Trustnet Direct analyst Tony Cross.
International Airlines Group, owner of British Airways and Iberia, saw its share price fall 1.32 percent to 352.50 pence in mid-afternoon London trading.
In Frankfurt, Lufthansa stock sank 2.26 percent to 11.90 euros, while Air France-KLM shares lost 2.18 percent to 6.94 euros in Paris.
"The news of a first diagnosis of Ebola in the United States also affected risk appetite, with airlines hit hard," noted Davy Stockbrokers.
Asian markets fell heavily on concerns about the global economy, with Tokyo tumbling 2.61 percent, Seoul losing 0.77 percent and Sydney shedding 0.68 percent.
Hong Kong, Shanghai and Mumbai were closed for public holidays. A pro-democracy campaign in Hong Kong is also being closely tracked by markets.
In foreign exchange deals on Thursday, the dollar fell against the Japanese currency, one day after breaking 110 yen for the first time in six years.
It stood at 108.49 yen in London on Thursday, against 108.91 yen late Wednesday.
The euro firmed to 78.43 pence from 77.99 pence late on Wednesday. The pound fell to $1.6129 from $1.6184.
On the London Bullion Market, the price of gold slid to $1,214.50 an ounce from $1,216.50.