The German DAX fell 4 percent in about 15 minutes in Thursday afternoon trading, Bloomberg News reported.

The declines came amid unconfirmed market speculation that Germany's credit rating may be downgraded, analysts said, reported Thursday.

While it is clear that no country is immune from downgrades and that Germany won't be able to grow forever against the backdrop of a weakening world economy, it seems difficult to see a justification for a downgrade at a time when the economy is expected to post almost 3% growth this year (even after the disappointing second-quarter number) and the deficit expected to fall to little more than 1% of GDP,  Atif Latif, director of trading at Guardian Stockbrokers in London, told Thursday.

The drop turned all three major exchanges negative: London's FTSE was down about 1.6 percent, France's CAC 40 was off about 0.8 percent, and Germany's DAX was down 2.2 percent.

At least initially, U.S. stock markets were unaffected by the plunged, as the Dow Jones Industrial Average traded at the same level as before the rumor surfaced, down about 135 point to 11189.