World markets plunge once more
Shares have tumbled again as many global markets entered official bear market territory after one of the worst days on Wall Street since the collapse of Lehman Brothers in 2008.
Asian markets briefly recouped many earlier losses and European stocks opened higher. That rally proved short-lived, as investors worried about the consequences of the US credit downgrade, Europe's debt crisis and mounting expectations of a global recession.
Many investors are looking for relatively safer assets to park their cash and the price of gold and the Swiss franc continued to rise to record levels.
"Many global equity markets have now entered bear market territory having fallen by over 20% from their recent peaks," said Lee Hardman, an analyst at The Bank of Tokyo-Mitsubishi UFJ.
Europe's declines followed big falls in Asia earlier. The retreat was led by Hong Kong's Hang Seng, which tumbled 5.7% to 19,331.
US stocks were also poised for further falls at the open, a day after the Dow Jones industrial average fell a dizzying 634 points.
"It's still very hard to predict how the US market will do," said Jackson Wong, vice president of Tanrich Securities in Hong Kong. "When the dust settles, if the situation doesn't get worse in the US or Europe, the situation will rebound. But the US has to stabilise."
All eyes will be on the US Federal Reserve later when it holds its regular monetary policy meeting and in particular whether the central bank announces measures to stabilise markets and get the US economy going again.
"The odds now favour some form of further policy easing at tonight's meeting," said Kit Juckes, an analyst at Societe Generale.
Worries about the US economic recovery have been building since the government said that economic growth was far weaker in the first half of 2011 than economists expected. Intensifying concerns were reports showing that the manufacturing and services industries barely grew in July, although job growth was better than economists expected last month.