Sentiment also soured as speculation continued to swirl over an alleged money-laundering scandal at Denmark's Danske Bank.

Around midday, London's benchmark FTSE 100 index was down 0.6 percent compared with Thursday's closing level.

In the eurozone, Frankfurt's DAX 30 index also fell 0.6 percent and Paris dipped 0.5 percent.

The euro dropped to $1.1496.

Asia also nursed fresh losses, hit by fears about the path of US rate hikes -- and increasingly fraught relations between China and the United States.

Traders tracked an overnight sell-off on Wall Street, where all three main indexes were rocked by another jump in the 10-year US Treasury bond yield to a fresh seven-year high.

With Treasuries the key gauge for Federal Reserve policymakers when deciding interest rate hikes, markets are growing more concerned that the cost of borrowing will rise more than previously expected and in turn hit the economy.