The U.S. Federal Reserve's tacit acknowledgment that America's economic slowdown is likely to persist for quite a while sent global stock markets skidding Thursday as investors brushed off the central bank's efforts to spur growth and focused instead on its gloomy assessment.

Oil tumbled too but the dollar held its own against the euro, which has been weighed down in recent weeks over concerns that Greece might go bankrupt. Hong Kong's Hang Seng led the retreat lower earlier during the Asian session with a near 5 percent dive.

The losses began Wednesday afternoon in the U.S. after the Fed announced a highly anticipated program to trade in $400 billion worth of short-term bonds for the same amount of longer-term bonds. The goal is to ensure low borrowing rates for a long period, thereby helping to stimulate the housing market and other economic activity.

The program _ known as Operation Twist _ was bigger than expected, but that seemed to work against the Fed's purposes: Investors took it as a signal that the central bank was growing more concerned about the economy. In its statement, the Fed noted "significant downside risks to the economic outlook, including strains in global financial markets."

"Confidence was already shaky, at best, and the Fed's words only heightened worries about the outlook," said Benjamin Reitzes, an analyst at BMO Capital Markets.

In mid-afternoon trading in Europe, France's CAC-40 was down a hefty 5.4 percent at 5,186 while Germany's DAX slid 4.6 percent to 5,185. The FTSE index of Britain's leading shares was down 4.9 percent at 5,027.

Wall Street was also set for big losses at the open soon _ Dow futures were 2.3 percent lower at 10,752 while the broader Standard & Poor's 500 index futures fell 2.6 percent to 1,126.

The euro was also under severe pressure, trading 1.2 percent lower at $1.34 as the dollar garnered support through its widely-percieved status as a a safe haven in times of financial turbulence.

Europe's single currency, which is used by 17 countries, is also being dragged down by concerns over Greece, which is currently in talks with its creditors about whether it has done enough to get the next slice of its bailout. If Athens doesn't get the (EURO)8 billion ($11 billion) by mid-October, it will run out of money.

A Greek default would be disastrous for an already suffering eurozone.

Concerns about Greece have hit European banks, especially those in France, hard in recent weeks since the institutions hold a substantial amount of Greek debt.

On Thursday, the CEO of BNP Paribas was the latest to try to calm markets by declaring that his bank had a sufficient cushion of cash on hand. There had been reports that the bank was shopping around for investors in the Middle East.

"I formally deny it. We have no specific contact because we have no need for a capital increase," Baudouin Prot told BFM Business television. "With BNP Paribas, there is no particular problem. It's at the eurozone level that the concern rests and it's at that level that it needs to be solved."

The day also brought more bad news about the state of the eurozone economy there, with a closely watched survey from financial information company Markit indicating potential recessionary conditions.

Markit's monthly purchasing managers index _ a gauge of business activity _ fell to 49.2 in September, its lowest level since July 2009, from 50.7 the previous month.

"The fall in the eurozone composite PMI below the theoretical 50 'no-change' barrier provides the strongest sign yet that the region is on the cusp of a recession," said Ben May of Capital Economics.

A recession will only make it harder for Europe's heavily indebted countries to pay down their debts since it effectively means their governments are taking in less income.

Fears of a recession have driven down oil prices, which typically rise when economies are humming and their energy demands are increasing.

Benchmark oil fell a whopping $4.66 in electronic trading on the New York Mercantile Exchange to $81.26. Brent crude was down $2.75 to $107.61.

Earlier in Asia, stocks also fell. Japan's Nikkei 225 dropped 2.1 percent to close at 8,560.26. South Korea's Kospi slid 2.9 percent to 1,800.55. Australia's S&P/ASX 200 was 2.6 percent down at 3,964.90.

Hong Kong's Hang Seng saw the biggest fall, diving over 900 points, or 4.9 percent, to close at 17,911.90.

In mainland China, the Shanghai Composite Index closed down 2.8 percent at 2,443.06.

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AP Business Writer Pamela Sampson contributed to this report from Bangkok.