European stocks slumped on Monday following a rout in Chinese markets, wiping hundreds of billions of euros off leading shares and sending one benchmark index to a seven-month low.

Trading screens flashed red across the region as stock markets in Frankfurt and Paris fell more than 5 percent, while Athens’ bourse – already down sharply due to Greece’s debt problems – slumped around 10 percent.

The pan-European FTSEurofirst 300 was down 6.4 percent going into the close of the trading session, wiping off more than 500 billion euros ($582.55 billion) from the index’s tota market capitalisation.

The FTSEurofirst was on course for its worst one-day percentage fall since it slumped more than 7 percent in October 2008, just after the demise of U.S. bank Lehman Brothers. It was also on course for its worst monthly loss since 2002.

It also sank to its lowest level since January, having lost more than a trillion euros in market value since the start of the month as China’s devaluation of the yuan stoked fears of global economic deflation.

Chinese stocks plunged more than 8 percent on Monday, in their biggest one-day loss since the height of the global financial crisis in 2007, after Beijing held back expected policy support at the weekend following last week’s 11 percent slide.

The STOXX 600 Basic Resources Index, whose constituents are mostly mining stocks, and the energy sector fell 10 percent and 8.8 percent respectively, as commodities slumped to multi-year lows, with China being one of the world’s biggest users of metals and oil.

Shares in banks and asset managers also fell sharply, while the Euro STOXX Volatility Index rose 14 points to its highest level since late 2011 – more evidence of investor unease.

Source: MarketWatch