Nervous European markets opened sharply lower on Friday after an overnight 2% fall on Wall Street.

The Dow Jones tumbled on the back of Brazilian stocks which plummeted 8.8% after Congress threw out the pension reform plans until next year.

The rejection may make it more difficult for Brazil to meet International Monetary Fund conditions for much-needed aid.

The dollar opened softer in early European trade, weakened by Thursday's unprecedented round of European interest rate cuts which provoked talk of a further rate easing by the US Federal Reserve.

Frankfurt

Germany's electronic Xetra DAX index began almost 2% weaker, shedding Thursday's rate cut inspired gains.

Dresdner Bank was among the early losing stocks but volumes were very thin.

Paris

French stocks opened down 1.81%, reversing 1.8% rate cut gain on Thursday, following the sharp fall in Brazil and US shares.

By 0904 GMT, the CAC-40 was down 61.21 points, or 1.65%, at 3,654.46.