European Stocks Fall Amid Inflation Concerns And Weaker Dollar

London, UK (AHN) - European markets fell as stocks were battered by inflation concerns, a weaker U.S. dollar and continuing high oil prices.

The pan-European Dow Jones Stoxx 600 shed 2.5 percent to 282, marking the largest single-day drop since March.

The U.K. FTSE 100 slipped 2.5 percent to 5,484 a drop matched by France's CAC-40 which slumped to 4,323. In Germany, the DAX 30 lost 2.1 percent to 6,284.

Fears of European inflation bolstered the belief that the European Central Bank Thursday will increase key lending rates to combat euro inflation touching a record 4 percent.

A weaker U.S. dollar sent exporters Nokia and Infineon Technologies downward. The European chipmaker fell 11.6 percent.

News of higher oil prices also slammed automakers and airlines. German carmaker Daimler lost 4.9 percent as British Airways retreated 4.5 percent.

Financial stocks also took part in the downward spiral as Swiss bank UBS announced a corporate restructing, German bank Deitsche Bank dropped 7 percent and France's Societe Generale fell 3.2 percent.