European stock markets fell Thursday as traders reacted to China's economic problems, Greek action following its bailout and sliding oil prices.

Greek stocks sank despite Athens using a chunk of its latest bailout to make a loan repayment to the European Central Bank, as concerns elsewhere dragged down global markets.

London's benchmark FTSE 100 index dropped 0.24 percent to stand at 6,388.01 points in mid-afternoon deals.

Frankfurt's DAX 30 shed 1.12 percent to 10,562.39 points and the CAC 40 in Paris lost 1.49 percent to 4,811.38 compared with Wednesday's close.

In foreign exchange, the euro jumped to $1.1166 from $1.1121 late on Wednesday in New York.

"The European stock markets are continuing to lose ground as investor worries over China intensify," said Fawad Razaqzada, analyst at Gain Capital trading group, citing Frankfurt's morning drop to 10,534.30 points as a case in point.

"Such is the level of pessimism that the DAX has even taken out the low it hit in July when the Greek crisis... was at the forefront."

Greece on Thursday cleared 3.4 billion euro ($3.79 billion) payment owed to the ECB, a source close to the matter said.

That effectively ended the bitter feud dividing the Greece's radical left government and its European creditors that had threatened to force the country out of the euro and sow chaos in the global economy.

But Athens' main stocks index was down 3.45 percent at 652.02 points in afternoon deals, with deepening political rifts in Athens putting pressure on Prime Minister Alexis Tsipras to call snap elections.

Greece had on Wednesday won the final green light to start repaying its debts and reviving its crippled economy after eurozone finance ministers formally approved the reforms-for-loans package worth 86 billion euros.

"The eurozone indices fared a bit worse than the FTSE (on Thursday)... despite the fact that Greece paid back the ECB on time, an event that would have once caused indices-wide jubilation," said Connor Campbell, analyst at Spreadex trading group.

Asian markets slumped on Thursday on heightened concerns about the health of China's economy and after Federal Reserve minutes from its last policy meeting clouded the outlook for US interest rates.

China's benchmark Shanghai stock index closed down 3.42 percent, as worries persisted over the country's weak economy and currency, dealers said.

On currency markets, the dollar had tumbled Wednesday as the Fed dampened expectations for a rate rise in September and outlined its fears about the global economy, sending oil prices tumbling.

The minutes "did not shed much more in the way of solid news on the timing of the first rate hike which now might be complicated by Chinese developments and increasing market volatility", said Neil MacKinnon, economist at VTB Capital.

Dealers said markets remained pressured by uncertainties over China after the shock devaluation of the yuan last week added to fears that growth in the world's second biggest economy is slowing more than thought.

US stocks opened lower Thursday on worries about slumping oil prices in addition to China's slump.

Five minutes into trade, the Dow Jones Industrial Average was down 1.02 percent at 17,172.21 points.

The broad-based S&P 500 dropped 0.89 percent to 2,061.16 points, while the tech-rich Nasdaq Composite Index fell 0.96 percent to 4,971.11.

Investors were watching falling oil prices, with the US benchmark contract close to the psychologically important $40-per-barrel level.