A grim Fed outlook and uptick in virus cases in some US states fans concerns about economic recovery.Read more
The FTSE-100 index opened at 6462.55. and then plummeted 8.2% in early trading.
In the eurozone, Frankfurt's DAX opened 8.1% lower to 10,607.80.
The Paris CAC40 dived 4.2 percent to 4,921.91.
Some companies were severely impacted by market volatility this morning caused by a 30% drop in oil prices and the disruption caused by the coronavirus.
UK energy company Tullow Oil tanked 57% to its lowest level since 2004.
The UK stock market has extended its gains, with the FTSE 100 now up 2.4% at 6,813.49.
Other European markets are also showing healthy rises, with the French Cac 40 index and Germany's Dax both up by more than 2%.
This follows huge gains on Wall Street on Thursday, although Asian markets were not quite so buoyant.
The rebound follows news that the G7 will be having a conference call later to discuss an action plan to try to combat the coronavirus crisis.
However, Connor Campbell from Spreadex warned: "The danger, of course, is that if the world’s financial bigwigs fail to announce a coherent, co-ordinated plan of attack – and Reuters is reporting that the draft statement currently being worked on doesn’t call for such action – these gains could unravel double-quick."
After an encouraging start to the day, shares are now starting to lose those early gains.
London's FTSE 100 index, which had risen about 3% in early trade, is now up by just 0.9%.
Elsewhere in Europe, France's Cac 40 index is flat while Germany's Dax index is now down 0.4%.
The blue chip FTSE100 index fell to 7,372.05 tumbling 1.49% on the day as a slight bump the market received from the Bank of England rate decision could not dispel fears over the spread of the coronavirus. .
The FTSE 250 slid 0.86% into the end of the day at 21,283.55.
In France, the CAC-40 dropped 1.58% to 5,861.01 while in Germany, the DAX stumbled 1.51% to 13143.16.
The pound rose against the dollar .7% to 1.3099 from the previous close.
The FTSE 100 continued to slide on Thursday, with the blue chip index falling 0.94% to 7,413.10 in midday trading as the number of people infected by the coronavirus continued to spread.
"As the deadly virus continues to spread and the death toll keeps on increasing, the situation is now starting to have a significant impact on analysts’ and economists’ growth forecasts for China, providing unwelcome sentiment for stock traders," said Pierre Veyret, an analyst at ActivTrades.
The FTSE 250 also trended downward 0.31% at 2,1403.02.
In France, the CAC-40 traded 1.33% lower at 5,875.93 while in Germany, the DAX dropped 1.06% to 1,3204.20.
The FTSE 100 followed Asia stock markets lower on Thursday, with the blue chip index falling 0.78% to 7,425.43 in early trading.
The death toll from the coronavirus is rising and it has now spread to every Chinese region.
The FTSE 250 opened 0.46% lower at 21,369.21.
In France, the CAC-40 dropped 1.33% to 5,875.91 while in Germany, the DAX declined 1.34% to 13,166.42.
Wall Street's gains have helped European stock markets to reach higher levels.
The Dow Jones has so far climbed 267.77 points, or 0.59%.
The FTSE 100 is now up 0.88%, having added 67.15 to reach 7,479.96.
The German Dax is up 0.68%, after climbing 90.25 while the French Cac 40 is up 0.83%, or 48.46 points.
Shareholder gloom is widespread across Europe with the German Dax has fallen 2.63% to 13,219.96 while the French Cac 40 has slid 2.70% to 5,861.80.
The Euro-wide Euro Stoxx 50 is down 2.64% at 3,679.37.