At 1117 GMT the pan-European FTSEurofirst 300 index was down 1.9 percent at 843.05 points after moving in and out of positive territory in early trade.

The index has lost more than 43 percent this year, hurt by a credit crisis and several developed economies going into recession.

Volkswagen fell 10 percent, the biggest loser in the FTSEurofirst 300 after it said group vehicle sales fell 5.1 percent in October.

Among banks, Standard Chartered fell 3.4 percent following weekend press reports that it is investigating whether to raise billions of pounds to bolster its capital base and has asked JP Morgan and Cazenove to consider options for a capital injection.

UBS was down 5.7 percent, after announcing its new compensation pan for directors. HSBC shed 3 percent and BNP Paribas lost 6.5 percent.

Futures for the Dow Jones, S&P 500 and Nasdaq were down between 0.5 and 0.7 percent.