European Shares Set to Fall on Credit, Econ Worries

European shares were set to open sharply lower on Thursday, tracking big falls in the United States overnight on concerns over continued losses in the financial sector and an economic downturn.

The bookmakers saw Britain's FTSE opening down as much as 1.6 percent, Germany's DAX down 1.5 percent and France's CAC down 1.8 percent.

Investors will focus on the Bank of England, which is widely expected to hold interest rates at 5 percent.

Fannie Mae and Freddie Mac slumped as investors worried that the two pillars of the U.S. housing market would have to raise billions through share sales, and Merrill Lynch fell after Fitch said it may cut the investment bank's debt rating.

Tech stocks will be in focus after Cisco said it saw the economy picking up only early next year.