Anxiety was exacerbated by weaker-than-expected data from key corners of Europe as German consumer morale dropped to its lowest level in more than a year, Britain revised down growth figures and Sweden slashed its economic forecasts.
The worries prompted widespread selling in most major stock markets and saw investors head for safe-haven assets.
The dollar and yen and US and German government bonds rose as falls in London, Paris and Frankfurt pushed the FTSEurofirst 300 index of European stocks and MSCI's global index down 0.6 and 0.4% respectively.
Asian markets also fell mostly, tracking global sentiments.
"Risk assets look vulnerable over the holiday trading period," said Peel Hunt strategist Ian Williams.
Brent crude oil fell more than $1 per barrel towards $109 and bullion slipped $1.38 an ounce to a near four-month low and on track for its steepest weekly drop since June.