Share prices, commodities and the euro fell sharply as investors fled risky assets amid growing fears of a eurozone banking crisis and rising tension on the Korean peninsula.
Stock markets took a pounding, leaving the FTSE Asia- Pacific index down 3.1 per cent at a 10-month low. On Wall Street, the Dow Jones Industrial Average slipped through 10,000 as the dollar and US Treasuries benefited from the flight from risk.
各股市均报大跌，富时亚太指数(FTSE Asia-Pacific index)下跌3.1%，至10个月低点。在华尔街，道琼斯工业平均指数(Dow Jones Industrial Average)盘中曾跌破1万点关口，而美元和美国国债则从此番风险逃离中获益。
Four Spanish savings banks announced plans to merge, in the latest attempt to restructure the country's financial sector. But analysts were sceptical about the plan, questioning whether they would cut costs or clean up balance sheets.
Korean tensions added to the concerns about European sovereign debt and the strength of the global recovery that have convulsed financial markets.
“Markets have an underlying sense of greater fragility,” said Alan Ruskin, strategist at the Royal Bank of Scotland. “In the political arena, investors feel the stakes are higher than ever – you're dealing with a nuclear power in North Korea.
“The economic story is about similar high stakes and there's a sense the authorities are all in and the policy levers are more or less tapped out.”
South Korea's Kospi index dropped 2.75 per cent to 1,560.83, a three-month low. Other markets in the region were harder hit. Tokyo's Nikkei 225 dropped 3.1 per cent to 9,459.89, a five-month low.
Investors rushed into havens, including US Treasuries and German government bonds. Yields on benchmark 10-year Treasuries, which move inversely to prices, fell to a year-low at 3.136 per cent.
Germany's plan to extend a ban on naked short-selling of shares fuelled anxiety. Last week's decision to impose a partial ban on naked short selling – selling securities such as shares and bonds that are not owned or borrowed – sent shockwaves through the markets and has raised fears of a disorderly crackdown by regulators.
However, James Bullard, president of the Federal Reserve Bank of St Louis, said that the European debt crisis was unlikely to derail the US or global recoveries, Bloomberg reported.
但据彭博通讯社(Bloomberg)报道，圣路易斯联储银行(Federal Reserve Bank of St. Louis)总裁詹姆士•布拉德(James Bullard)表示，欧洲债务危机不太可能阻碍美国或全球的复苏。
“There are several reasons why this new threat to global recovery will probably fall short of becoming a worldwide recessionary shock,” Mr Bullard said in London.
“Sovereign debt crises have been with us for many, many years. There is nothing intrinsic about such crises that they need to become important shocks to the broader, global macroeconomy.”
Albert Edwards, global strategist at Société Générale, predicted that the markets would fall to levels below their March 2009 nadir.
法国兴业银行(Societe Generale)全球策略师阿尔伯特•爱德华兹(Albert Edwards)预测，市场会跌至2009年3月低点水平以下。