The European markets turned into a total debacle today. The Dubai default, and its effect on European banks , is the most-cited reason.

WSJ : European shares recorded their biggest one-day drop since April on Thursday, with banks leading a broad tumble for markets amid
worries about exposure to Dubai debt.

The pan-European Dow Jones Stoxx 600 index closed down 3.3% at 239.85, a level not seen since early November.

The U.K. FTSE 100 index closed down 3.2% at 5194.13, the French CAC-40 index ended down 3.4% at 3679.23 and the German DAX index closed down 3.3% at 5614.17.

Many investors have asked about HSBC/STAN exposure to Dubai World (a leading government-linked property developer/holding company) and its affiliates, amidst Nov 26 press reports of Dubai World’s request for a creditor standstill agreement on its c.US$59bn debts (source: Bloomberg). Both HSBC and STAN have declined to comment on individual firm exposures.

Read the Whole thing in Zero Hedge >

In other news…

London Stock Exchange Group PLC on Thursday was hit by a technical glitch, forcing it to suspend the trading of U.K. stocks for more than three hours.

The exchange stopped trading of shares at 10:33 a.m. GMT (5:33 a.m. EST) after receiving reports that some stocks had “connectivity issues,” a spokesman said. Trading resumed at 2 p.m. GMT, but the cause of the problem was still being investigated.

The glitch comes a day after Chief Executive Officer Xavier Rolet reiterated plans for the LSE to replace its TradeElect trading engine with a new, faster one.