LONDON (AP) - World markets dived yesterday as investors waited to see if Ireland will end up requesting a financial lifeline from its partners in the eurozone, and amid renewed fears over whether bailed-out Greece is doing enough to get more rescue funds.

In Europe, the FTSE 100 index of leading British shares closed down 138.51 points, or 2.4 percent, at 5,681.9 while Germany's DAX fell 126.93 points, or 1.9 percent, at 6,663.24.

The CAC-40 in France ended 101.77 points, or 2.6 percent, lower at 3,762.47.

Investors' attention was focused on Brussels, where the 16 finance ministers of the countries that use the euro were gathering for a crucial meeting, with Ireland's debt crisis the sole talk of the town.

Developments in China provided a gloomy backdrop to markets yesterday after the country's benchmark Shanghai Composite Index dropped 4 percent to a one-month low of 2,894.54, meaning the index is down eight percent in just three trading sessions amid fears that Chinese monetary authorities will be raising interest rates to cool a property boom and dampen down on rising inflationary pressures. Rumours that price controls may be introduced too have added to investors' concerns.

Better-than-expected German economic news helped solidify the euro.

The ZEW institute said its main gauge of investor sentiment rose in November to 1.8 from minus 7.2 the previous month, meaning that investors think that conditions will improve over the coming six months than deteriorate.

The rise was ahead of the market consensus of a more modest improvement to minus four.

Earlier in Asia, South Korea's Kospi closed down 0.8 percent at 1,899.13 after the Bank of Korea raised its key interest rate for the second time in four months after inflation burst above four percent in October.

It also adopted a more aggressive stance, removing the wording "under the accommodative policy stance" from its statement, suggesting that interest rates will continue to rise to more normal after two years of super-low borrowing costs.

Japan's Nikkei 225 stock average lost 0.3 percent to 9,797.1. Hong Kong's Hang Seng slid 1.4 percent to 23,693.02 while Australia's S&P/ASX 200 gained 0.3 percent to 4,700.3.