European markets closed sharply lower on Thursday, impacted by steep losses in U.S. stocks.

The pan-European Stoxx 600 closed the session provisionally down by 1.95 percent, with financial services and oil and gas stocks leading the losses. A dramatic sell-off on Wall Street in the previous session had prompted the European benchmark to fall to its its lowest level in more than 21 months before it recovered slightly.

However that up tick was short-lived as renewed selling on both sides of the Atlantic gathered pace. At one point in the mid-afternoon, the two-day loss on the Dow Jones Industrial Average had reached 1,100 points.

In London, the FTSE 100 in London shed 1.94 percent on Thursday. In Germany the DAX finished off by 1.36 percent, while stocks listed on the CAC 40 in Paris lost 1.79 percent on average.

Global equity markets have tumbled in recent days on the back of heightened fears about global economic growth and rising interest rates. In the United States, the tech-heavy Nasdaq is on course for its worst month since November 2008.

Looking at individual stocks in Europe, Britain's WH Smith plummeted to the bottom of the index after announcing new plans to restructure its high street stores. Shares of the London-listed stock finished down 11.16 percent on the news.

Britain's Hays also traded sharply lower, after the recruitment agency warned currency headwinds could hit its fiscal 2019 year. Shares of the company ended lower by 10.4 percent

Meanwhile, shares in Germany's Dialog Semiconductor rose 16.58 percent sit atop the Stoxx 600 index on Thursday. The company's shares soared after it announced a new $600 million deal with Apple.