A global measure of equity prices fell to a 1-year low on Thursday as Wall Street extended its October slide into a sixth session as investors feared an escalating US trade war with China and risks from a recent climb in interest rates.
US shares are set for big declines when markets open Thursday.
Wall Street tumbled on Wednesday in a fast skid, with the tech-heavy Nasdaq leading the declines while the Dow fell more than 800 points and the S&P 500 index hit its longest losing streak in two years.
U.S. stock indexes dived around 1 percent on Wednesday as worries over China and the impact of rising Treasury yields on global growth drove falls in luxury goods companies and chipmakers.
Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in US interest rates.
The Dow Jones has dropped by 3.2 per cent to 25,599 points.
Innes, the Singapore-based head of Head of Trading for Asia Pacific with OANDA, attributed the slide to a combination of factors, including the possibility further interest rate hikes and the battle over tariffs between the US and China.
The spread of red ink overseas, though, suggested more turbulence ahead for Wall Street, where a growing list of concerns is sowing unrest for a market that has been on a historic run on the back of strong earnings.
Japan's benchmark fell by an unusually wide margin of 3.9 percent and China's main index lost 4.3 percent.
That all played into a market that is increasingly anxious about global growth after warnings from the International Monetary Fund this week and a rise in Treasury yields to a more than 7-year high above 3 percent that signals a tightening of available capital globally.
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"It's a risk-off environment as investors are focusing on spiking yields and taking profits off the table as they are concerned about whether the bull market is actually coming to an end", said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada. Bond yields move in the opposite direction to price.
The technology-heavy Nasdaq composite dropped 4.1% to 7,422 points, its biggest loss since February 8.
"Short-term bonds are getting to be a compelling place to hang out", he said. Industrial and internet companies also fell hard. Stocks plunged in Taiwan and fell across Southeast Asia.
US gold futures settled up $1.9, or 0.16 percent, at $1,193.4.
It will take more than a daily stock market correction to stop the Fed from hiking, said George Goncalves, managing director and head of fixed income strategy at Nomura in NY.
The dollar index fell 0.17 percent, with the euro up 0.25 percent to $1.1518.
It is the biggest sell-off in U.S. markets since February, a negative sentiment also reflected in European markets - with Paris (-2.1pc), Frankfurt (-2.2pc) and London (-1.3pc) finishing deep in the red.
The dollar fell to 112.59 Japanese yen from 113.05 yen late Tuesday.
Shares in upscale jewellery retailer Tiffany & Co and perfume maker Estee Lauder both fell 7 percent after a warning from French luxury goods firm LVMH about softening demand in China.