Euro Stocks Set to Open Sharply Lower

European index futures sank in early trade on Tuesday as a global equities selloff, sparked by mounting fears of a U.S. recession, continued to hammer equity markets around the world.

At 0706 GMT, the Euro Stoxx50 futures were down 3 percent, the DAX futures down 3.1 percent and the CAC futures down 2.6 percent.

European shares sank nearly 6 percent on Monday, their biggest one-day slide since the Sept. 11, 2001 attacks, as worries over the prospect of a U.S. economic downturn and fears of more write-downs in the financial sector sent investors running for cover.

"Expectations are for further downside to be seen at the open for the major European markets and although after a run of selling there's usually the potential for a rebound as the bargain hunters move in, today's picture is a skewed by the fact Wall Street was shut yesterday so the first thing traders across the Atlantic will need to do is catch up," said Matt Buckland, trader at CMC Markets.

U.S. stocks reopen on Tuesday after being closed for a holiday on Monday.

The FTSEurofirst 300 index of top European shares has already lost 15 percent since the start of 2008, and is down nearly 22 percent from its 52-week high reached last summer.

Many analysts consider a fall of 20 percent from a peak as signalling a bear market.