Shares on the French and German stock exchanges fell sharply in early trading Thursday, dipping below three percent, over oil price worries and after Federal Reserve boss Janet Yellen raised concerns about the global economy.

At 0830 GMT, France's main CAC 40 index was 2,57 percent lower, at 3,956.73 points, after falling briefly more than three percent.

The DAX fell by 3.3 percent to an intraday low of 8,719.79 points. At 0845 GMT, it was showing a loss of 2.64 percent, at 8,779.11. Deutsche Bank was the biggest loser, shedding 6.04 percent to 13.7 euros.

Shares in the bank rocketed up more than 16 percent Wednesday on speculation Germany's biggest lender may launch a bond buyback to assuage concerns about its financial strength.

Elsewhere in Europe, shares in Milan plunged more than 5.0 percent Thursday, pulled lower by banking shares. The main Madrid bourse also briefly lost more than three percent shortly after opening before slightly rebounding.

On Wednesday, European stocks ended a three-day losing streak as banking shares rallied.

But Asian markets extended their rout and the dollar hit 15-month lows against the yen Thursday after Yellen's comments essentially quashed the chances of another US rate hike any time soon.