(RTTNews) - The European markets fell sharply on Monday, as declines in U.S., Eurozone, U.K. and Chinese manufacturing raised concern that global economic crisis is worsening.

A report from the Institute for Supply Management in the U.S. showed that the index of activity in the manufacturing sector fell to 36.2 in November from 38.9 in October, with a reading below 50 indicating a contraction in the sector. With the decrease, the index fell to its lowest level since May of 1982, when it came in at 35.5. Economists had been expecting the index to edge down to a reading of 38.0.

The Markit Eurozone Final Manufacturing PMI came in at 35.6 in November, down from the flash estimate of 36.2, the latest survey conducted by Markit Economics showed Monday. Economists had expected the reading to match flash estimate. The indicator plummeted to a new series low in November.

The UK CIPS/ Markit Purchasing Managers’ Index fell to 34.4 in November from a downwardly revised 40.7 in October, a survey from the Chartered Institute of Purchasing & Supply and Markit Economics showed Monday. The November level was the lowest since data was first collected in January 1992.

China’s Purchasing Managers’ Index fell to a seasonally adjusted 38.8 in November from 44.6 in October, the China Federation of Logistics and Purchasing said today.

The London interbank offered rate, or Libor, that banks say they charge each other for three-month loans in dollars rose for a third day. The rate climbed less than half a basis point to 2.22%, according to British Bankers’ Association data. The overnight rate dropped seven basis points to 1.09%, nine basis points above the Federal Reserve’s target.

Crude for January delivery fell as much as $4.91 to $49.52 a barrel in New York after the Organization of Petroleum Exporting Countries deferred a decision to reduce output for another two weeks.

The FTSEurofirst 300 index of pan-European blue chips closed 6% lower at 810.04 points, while the narrower DJ Stoxx 50 index fell 6% to 2,029.66 points.

Around Europe, the U.K.’s FTSE 100 index fell 5.19% to 4,065.49, while France’s CAC 40 index slipped 5.59% to 3,080.43 and Germany’s DAX index dropped 5.88% to 4,394.79.

Economy sensitive banking stocks took the hammering. Barclays, Britain’s third largest bank, fell 6.7%, while BNP Paribas, France’s largest bank, slipped 7.6% and UBS, Switzerland’s largest bank, dropped 12.3%. Asia-focused bank Standard Chartered lost 13.9%.

Heavily weighted oil stocks lost ground after crude prices declined. BP, Europe’s biggest oil company, slipped 5.8%, while Royal/Dutch Shell, the second biggest, fell 5.3% and Total, the third biggest, dropped 7%.

Similarly, mining stocks declined after copper prices retreated in New York. BHP Billiton, the world’s biggest miner, fell 9%, while Anglo American, the second biggest, slumped 14.2% and Rio Tinto, the third biggest, slid 11.4%. Copper miner Antofagasta lost 7%.

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