European stock markets joined a global sell-off Thursday over concern about a possible end to US stimulus measures and as data showed slumping business activity across the eurozone, with London coming sharply off five-year highs. Shares in banks led indices lower, overshadowing upbeat company news across other sectors. London\'s FTSE 100 index of leading companies fell 1.62 percent to 6,291.54 points, a day after surpassing 6,400 for the first time in more than five years on the prospect of more cash stimulus from the Bank of England. Meanwhile in Frankfurt the DAX 30 shed 1.88 percent to 7,583.57 points, while in Paris the CAC 40 dropped 2.29 percent to 3,624.80 points Milan dived 3.13 percent to 16,010 points, also hit by concerns over the outcome of upcoming legislative elections in Italy, traders said. \"Following hints from the US that the Fed may scale back their asset purchase programme sooner than expected, European stock markets sold off across the board today, with usual suspect Italy the biggest faller ahead of much anticipated weekend elections,\" said CMC Markets trader Alex Young. With many having viewed European financial markets as being out of kilter with the real economic backdrop, he said Thursday\'s realignment also due to weaker than expected eurozone activity indicators should not have come as a great shock. Young said investors \"will now be pondering whether we are entering a necessary phase of correction on this equity bull run or whether this sell-off will gain traction in the weeks ahead. The European single currency fell to $1.3206 from $1.3283 late in New York on Wednesday. The dollar dropped to 93.02 yen from 93.61 yen, while the British pound reached the lowest point for two and a half years at $1.5132, but then rallied to $1.5258. -- Gold falls -- Gold prices struck a seven-month low point of $1,555.55 an ounce in Asian deals. They later stood at $1,577 on the London Bullion Market compared with $1,588.50 on Wednesday. In the eurozone, a leading growth indicator on Thursday showed that private business activity across the bloc hit a two-month low in February, signalling a steepening of the economic downturn. The Purchasing Managers\' Index published by London-based Markit fell to 47.3 in February from 48.6 the previous month. The February indicator contrasted sharply with an easing over the previous three months. The January figure notably showed private business activity at a 10-month high. \"A steepening rate of decline in February is a disappointment, and suggests that the eurozone is on course to contract for a fourth consecutive quarter in the first three months of the year,\" said Markit\'s chief economist Chris Williamson. \"The fall in the composite euro-zone PMI in February puts a dent in hopes that the region would emerge from recession in the first quarter,\" added Ben May of Capital Economics. Minutes from the Federal Open Market Committee\'s (FOMC) most recent policy board meeting meanwhile showed some members were in favour of cutting short the $85 billion-a-month bond-buying introduced last year to support the economy and which has helped lift global shares. The Fed introduced a third round of its asset-purchase scheme, known as quantitative easing 3 (QE3), in September and said it would not take its foot off the pedal until unemployment had fallen and the economy was strong enough. However, investor sentiment took a hit after the Fed minutes showed a \"number\" of board members said an ongoing evaluation of the easing \"might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labour market had occurred\". US stocks moved lower on Thursday, with the Dow Jones Industrial Average down 0.44 percent to 13,866.70 points in midday trading. The broad-based S&P 500 slipped 0.56 percent to 1,503.46 points, while the tech-rich Nasdaq Composite Index fell 0.82 percent to 3,138.61. In addition to the eurozone PMI data, Wall Street was also hit by Labor Department data showing initial jobless claims rose to 362,000 in the week ending February 16, more than the analyst estimate of 358,000. Asian stock markets suffered a heavy sell-off on Thursday, with Tokyo falling 1.39 percent, Sydney sliding 2.33 percent and Shanghai tumbling 2.97 percent. In Europe, banking shares fell sharply, with Italy\'s biggest bank Unicredit down 4.3 percent, Deutsche Bank losing 3.9 percent, Societe Generale shedding 4.5 percent and Lloyds Banking Group falling 3.1 percent. On the upside, BAE Systems gained 4.12 percent to 345.9 pence after the British arms maker announced plans to repurchase shares, alongside news of a drop in annual profits.