The C20 Cap index fell by 3.23 percent on Thursday, marking the index's worst day since it was established on November 25, 2011, Ritzau Finans reported.
Blue chip companies Vestas, Carlsberg, Genmab, FLSmidth and Pandora all fell dramatically.
According to Ritzau Finans, the poor performance could be chalked up to falling global commodity prices and Chinese economic woes.
“We are falling in line with Europe. It is likely due to the weakened Chinese market,” Martin Munk, a senior analyst at Jyske Bank, told Ritzau.
Other European markets fell between 0.4 and 2.1 percent on Thursday.
Wind turbine manufacturer Vestas was the biggest loser of the day, with a 7.6 percent fall, while Danish brewery giant Carlsberg's 3.4 percent drop followed a 9.2 percent dip on Wednesday.
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