China's 'Black Monday' wipes hundreds of billions off world markets in a single day
US stocks plunged at the opening bell - with the Dow dropping more than 1,000 points and the S&P 500 points in a major correction.
The extraordinary scenes triggered speculation that the sell-off was taking the Dow towards the point where circuit-breakers might cut in to stop trading.
The Nasdaq fell five per cent in the opening minutes, sparking an "automatic pause in trading".
The plunge came amid continuing anxiety about the Chinese government's ability to respond to its economic weaknesses. China's main index sank 8.5 per cent and Xinhua, the official Chinese news agency, called it “Black Monday”.
Oil prices, commodities and the currencies of many developing countries also tumbled on concerns that a sharp slowdown in China might hurt economic growth around the globe, the Associated Press reported.
The Shanghai index suffered its biggest percentage decline since February 2007, with many China-listed companies hitting their 10 per cent downside limits. The benchmark has lost all of its gains for 2015, though it is still more than 40 per cent above its level a year ago.
The sell-off intensified as European markets opened, where Britain's FTSE 100 was down 4.4 per cent, Germany's DAX 4.8 per cent and the CAC 40 of France 5.1 per cent. Dow futures were down over 4 percent while the S&P futures were 3.6 per cent lower.
Larry Summers, the former US Treasury Secretary, took to social media to add his concern about the situation and called on the Federal Reserve to abstain from a September interest rate hike.
"As in August 1997, 1998, 2007 and 2008 we could be in the early stage of a very serious situation," he wrote on Twitter.
As in August 1997, 1998, 2007 and 2008 we could be in the early stage of a very serious situation.— Lawrence H. Summers (@LHSummers) August 24, 2015
The 2008 crash was tragedy. The 2015 crash is farce.— Max Keiser (@maxkeiser) August 24, 2015
Independent News Service