European stock markets plunged on Monday, recording some of its biggest losses in over 6 years, as investors sold off on concerns the U.S. economy will fall into recession.

In London, the FTSE 100 index fell 5.48 percent to 5,578.20 points, a reminder of the 324-point fall seen on the day September 11 attacks which led the it down to its lowest level in 18 months. Other European markets were down including the DAX in Frankfurt which lost 7.16 percent to 6,790.19 points and in Paris, the CAC 40 index fell 6.83 percent to 4,744,45 points. The loss in these three indexes erased more than $350 billion of the value of their constituent stocks.

Financial markets have again been caught by fears of a U.S. recession and a worsening of the problems in the financial sector, Danske Bank strategists said in a research note.

The pace of the decline has been very strong and indicates that investors that have been long equities are now taking their losses, Danske Bank said.

There were big losses elsewhere in Europe, with Italy's MIB 30 losing 5.1 percent , Switzerland's benchmark index fell 5.3 percent and Spain's IBEX plunged 7.5 percent.

The US stock market was closed for the Martin Luther King one-day holiday on Tuesday. Meanwhile, after heavy losses were posted in Asian trade, the European markets opened lower and then slipped even further throughout afternoon traders as investors opted for safety and withdrew their money.

Dealers said a major spark for the Mondays drop came after US President George W. Bush's tax plan to revive the world's largest economy failed to appease recession concerns.