LONDON (AFP) -- European equities fell further on Wednesday, extending recent heavy losses amid mounting anxiety about government debt in Dubai and Greece, and ahead of a key budget statement in London, dealers said. In late morning deals, London's benchmark FTSE 100 index lost 0.17 percent to stand at 5,214.60 points. Frankfurt's DAX 30 slid 0.37 percent to 5,668.30 points and in Paris the CAC 40 shed 0.25 percent to 3,775.68. The DJ Euro Stoxx 50 index of top eurozone shares dipped 0.38 percent to 2,838.48 points. "Worries about sovereign credit risk and the ongoing global debt crisis are rattling the markets," said VTB Capital economist Neil MacKinnon. All three main European markets had nosedived on Tuesday as traders were gripped by concerns about Dubai's debt crisis, more ratings gloom for Greece and shrinking German industrial output. Added to the mix, Wall Street slumped Tuesday as recovery concerns festered after Federal Reserve chairman Ben Bernanke's sobering assessment of the US economy. "A weak day's trading on Wall Street and serious concerns about Greece's public finances and Dubai's debt restructuring ensured London ended deep in the red Tuesday," said Spreadex analyst Simon Rossington. "Fears over the solvency of Greece reached new levels after Fitch downgraded its outlook on the country by one rating to 'negative'. "Fellow ratings agency Standard & Poor's has already warned the Mediterranean country that it may have its credit rating cut." The Fitch ratings agency had on Tuesday downgraded Greece's long-term debt ratings as well as those on four of the country's largest banks, describing prospects for Greek public finances as negative. And on Wednesday, Fitch placed all rated structured finance transactions in Greece on negative watch. "The recession that has been raging in Europe since the middle of 2008 has exposed those countries with weak government finances," said Rabobank analysts in a note to clients. "The situation in Greece has been made worse by credibility problems, because its projected government deficit has exploded since a new government took over in October." Elsewhere, London investors will focus Wednesday on the British government's latest plans for taxation and spending. The Labour administration will announce a budget statement which it hopes will help fix public finances and revive its fortunes ahead of an election expected next year, amid reports it will slap a "supertax" on bankers' bonuses. British finance minister Alistair Darling will unveil his pre-budget report at 1230 GMT, against the backdrop of Britain's worst recession on record. "Darling?s main challenge is to rein in the budget whilst at the same time trying not to hurt the economy," Rabobank analysts added. Ratings agency Moody's had warned Tuesday that Britain and the United States needed to take action on public debt to protect their cherished AAA ratings. Across in the Middle East on Wednesday, Dubai share prices plunged 6.39 percent and Abu Dhabi shed 2.82 percent, even as the United Arab Emirates said it was coping with the global economic crisis. UAE stocks have tumbled since real estate giant Nakheel, part of state-owned conglomerate Dubai World, sought a six-month freeze on a 3.5-billion-dollar Islamic bond debt on November 25, raising fears of a Dubai debt default.

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