European shares suffered steep losses on Thursday and finished the session down nearly 2%.

Global growth concerns hit oil shares hard, but oil prices continue to rise due to renewed tension in the Middle East.

Banks started the day weak and came under further pressure from events in the US where the two big government-chartered home loan groups, Freddie Mac and Fannie Mae, fell substantially on the basis that they may be insolvent and will need to raise additional capital.

Retailers and food producers declined after another disappointing update from France’s Carrefour which fell 8.6%. It disappointed investors with its second-quarter sales and cautious outlook.

Copyright © 2012 euronews