US stocks fall could turn into '87-type crash

US stocks fell on Thursday, with the Nasdaq Composite Index tumbling 3.1 percent to a two-month low. The S&P 500 fell 2.1 percent.

Marc Faber, editor and publisher of the Gloom, Boom & Doom Report, told CNBC that the stock market is setting up for a decline more painful than the sudden crash of 1987.

"This year, for sure—maybe from a higher diving board—the S&P will drop 20 percent," Faber said, adding: "I think, rather, 30 percent. Who knows. But all I'm saying is that it's not a very good time, right now, to buy stocks."

The STOXX Europe 600 fell 0.5 percent on Thursday.

European stocks were not helped by the Bank of England, which left its key interest rate unchanged at 0.5 percent at its monetary policy meeting on Thursday. The BoE also maintained its stock of asset purchases from its quantitative easing programme at 375 billion pounds.

Possibly raising concerns for investors in Europe though were trade data earlier on Thursday from China. China reported that its exports fell 6.6 percent in March from the previous year while imports slumped 11.3 percent.

Despite the unexpectedly weak trade data, China's stock market led Asian shares up on Thursday after a plan was announced allowing cross-trading between Hong Kong and Shanghai's stock markets.