US markets continued the trend set by global markets, plummeting in mid-morning trading, with the the S&P 500 and Dow Jones both trading more than four per cent down.
That followed huge falls in Asia and Europe, with the FTSE 100 tumbling below 6,000 for the first time since 2012, while stocks in China fell as much as 8.5 per cent.
"To sum it up, fear of a global slowdown led by China is driving selling everywhere," said Peter O'Flanagan, head of foreign exchange trading at Clear Treasury.
Tech stocks were among the worst casualties, with Google falling 4.5 per cent, Yahoo dropping 7.2 per cent and Twitter falling 7.5 per cent.
Meanwhile, the FTSE 100 was down more than 300 points, or 5.2 per cent, at 5,868 points, driven by fears of a global slowdown after figures on Friday showed China's manufacturing slowdown was greater than thought.
Some analysts, though, chose to see the upside.