Stocks sink worldwide caused by a triple whammy of China fears, falling oil price and confusion about US interest rates.
Major US indexes suffered their worst day in 18 months and shares from China and Japan to Germany, France, Britain and elsewhere across the world all ended up in the red.
The US blue-chip Dow index and the broader Standard and Poor’s both tumbled 2.1%, marking their worst slump since February 2014.
Stocks in Europe took a hit after Greek Prime Minister Alexis Tsipras resigned Thursday following his submission to EU’s new austerity measures.
Global markets are also jittery amid concerns that China’s economic growth might be running out of steam. The world’s second largest economy has suffered a massive selloff in the last two months despite government’s attempts to stem the drop.
In the US, there is confusion about when the Federal Reserve is going to raise interest rates.
Raising rates could arrest the economic growth but not lifting it could signify that the global economy remains exceptionally weak.
Aggravating the situation, oil prices slid to their lowest levels in six and half years on new data showing a surprise rise in US petroleum inventories.
European benchmark Brent crude lost $1.65 to $47.16 a barrel. US benchmark West Texas Intermediate fell $1.82 to $40.80.
The world has not seen such price levels since the 2009 credit crunch. Despite the weak market, Saudi Arabia boosted its exports.
Market watchers are expecting further price slumps with the end of the summer driving season.
Expectations of a weaker environment left shares of the world’s biggest oil companies battered, with Exxon Mobil, BP, Marathon Oil, Chevron and ConocoPhillips all sliding to their lowest levels in several years.