Most of the European markets fell Thursday as investor sentiment turned negative amid the revived concerns about the debt crisis affecting the euro zone as the economic and financial instability faced by Spain continued to deepen.

France’s CAC 40 index was down 0.35 percent or 11.65 points to 3354.12.  Shares of Renault SA fell 1.70 percent and those of AXA SA dropped 1.30 percent.

London’s FTSE 100 index was marginally up 0.05 percent or 3.06 points to 5779.77. Shares of Bunzl Plc dropped 0.64 percent and shares of IMI PLC were down 0.54 percent.

German DAX 30 index dropped 0.30 percent or 21.77 points to 7183.46. Shares of Siemens AG fell 1.35 percent and those of Commerzbank AG declined 0.43 percent.

Spain's IBEX 35 was down 0.95 percent or 73 points to 7595. Shares of Acciona SA fell 2.06 percent and those of Bankia SA declined 3.73 percent.

Market sentiment was weighed down following Standard & Poor’s decision Wednesday to cut the sovereign credit rating of Spain to BBB-minus down from BBB-plus and also gave it a negative outlook.  "In our view, the capacity of Spain's political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining," S&P said in a statement.

Investors also feel that it would be unwise on the part of the Spanish government if it takes more time to seek the bailout. Market participants expect that Spain will ask for the bailout under the enhanced conditions credit line, triggering the bond-purchasing operation by the ECB.

Meanwhile, International Monetary Fund Managing Director Christine Lagarde said at a news conference in Tokyo Thursday that Greece will need two more years for meeting the fiscal targets. She stressed the need to offer more time to address the debt problem faced by Greece to return its economy to stability.

"This is what we advocated for Portugal, it's what we advocated for Spain, and it's what we're advocating for Greece, where I have said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation program that is considered," Lagarde said.