European stocks witnessed another dark session on Thursday, after index sank more than 4 percent as the U.S. Federal Reserve pointed to gloomy economic growth in the world's leading economy.

In Paris, the main index CAC 40 closed at 2,781 points, down by 5.25 percent following a heavy fall in banking shares suffering from mounting fears over their liquidity.

France's largest banks, Societe Generale, Credit Agricole and BNP Paribas slid by 9.57 percent, 9.49 percent and 5.7 percent respectively at closing.

London's FTSE 100 shrunk by 4.64 percent, while stocks in Frankfurt declined by 4.96 percent. A major sell-off was also reported in Milan and Madrid stock exchanges, where index tumbled by 4.52 percent and 4.62 percent respectively.

As to the European index, the Euro Stoxx 50 ended below 1,995 points, down by 4.9 percent, its heaviest lost since 2009.

"Gloomy outlook on U.S. growth, downgrade of several banks' rating and the debt crisis in the eurozone provoked the sell-off," said Gregory Moore, analyst at Montsegur Finance.s

"The problem is that many plans on Greek debt were approved but noting happened on the ground and unfortunately policies are slower than markets. That's why we report such fall today," he told local channel BFM TV.