Stock markets around the world plunged on Monday as investors worried that government bailouts for sick banks were failing to cure a crisis that threatens to infect global trade and industry too.
In early trading in New York, the Dow Jones Index was off 3.2 per cent, slipping below 10,000 for the first time in four years.
London's FTSE 100 was off 6.8 percent at 4641 and Germany's DAX lost 5.1 percent to 5503 in a new Black Monday.
The Nikkei 225 Stock Average fell by 4.25 percent to 10,473, with Tokyo stocks at their lowest in five years.
The spread of the banking crisis to Europe despite the US Congress' approval of a $700-billion bail-out for Wall Street has underlined sentiment that governments may not be able to cope.
Germany had to forge a fresh bail-out on Sunday for a lender, Hypo Real Estate, after a first rescue a week ago proved inadequate. Berlin soothed savers with a guarantee for personal deposits.
Hypo Real Estate stock was off 36.0 percent, the day's worst performer among the Frankfurt Stock Exchange top 30 stocks.
A German broker put his finger of the most painful worry: that more banks were on verge of default.
"Everyone is wondering who else has got a skeleton in the cupboard," he said in Frankfurt. Fears that commerce and industry might run short of credit, and general fears of global recession did the rest.
By mid-afternoon, the Paris Bourse's benchmark CAC 40 was down 7.5 percent, to 3,757, its lowest reading of the year.
Trading on Russia's two leading stock markets was twice halted on Monday as stocks plunged to three-year lows amid the deepening woes on the European markets and a dive in oil prices.
By the time of the second suspension, Russia's ruble-denominated MICEX had dropped 16.7 percent to 757.44.
Facing the worst financial crisis since the national default in 1998, the Finance Ministry earlier earmarked over $150 billion in loans primarily to bolster liquidity in the financial sector.
Shares on China's main stock market lost more than 5 percent of their value Monday, dragged down by banking stocks, on the first day of trading after the one-week National Day holiday.
India's benchmark Sensex stock index plunged by nearly 6 percent on capital outflows by foreign funds, while the Seoul Stock Exchange Kospi index had slumped 4.3 percent at close.
In Australia, the ASX 200 gave up 3.3 percent.
After the grim day of trading in Asia and Europe, the Americas took up the tune when their financial markets opened.
In Sao Paulo, panic selling on South America's largest stock exchange prompted authorities to suspend trading only 18 minutes after the session opened. In that time, the Bovespa index had plunged 10.5 percent to 39,824. After a half-hour cooling period, trading resumed - only to be suspended a second time after the index had lost almost 15.1 percent Throughout the day, it was banking stocks which took the biggest battering, especially in Europe.
In London, the Financial Times Index plunged by 6.6 percent to 4651 by mid-afternoon, the lowest in four years, as Britain digested the news from Germany of a wholesale guarantee on private savings.
Shares in mortgage lender Halifax Bank of Scotland (HBOS) plunged by 15 percent, reflecting ongoing unease about the takeover deal sealed with Lloyds TSB 10 days ago.
The German move, followed by Denmark, has intensified pressure on Britain to increase its protection for savings despite the huge burder that could turn out to be for the nation's government.
At midday, Spain's main Ibex-35 index had gone down 4.9 percent to 10,864, with bank shares sustaining heavy losses.
Giants Banco Bilbao Vizcaya Argentaria (BBVA) and Santander plunged 5.1 and 4.8 percent respectively.
On the Milan bourse, share prices slumped in early trading with the benchmark S&P/Mib index falling 5.8 percent to 24,417.
Leading the plunge was Italy's biggest bank by assets, UniCredit, which lost 12.8 percent in value despite its announcement Sunday that it plans to boost capital by as much as 6.6 billion euros ($9 billion) - a move to reassure investors about its finances.
On the Amsterdam Stock Exchange, the AEX index was off 7.0 per cent at mid-afternoon at 319.89. Dutch insurer Aegon was notably hit by the loss of confidence, dropping 21.6 percent.
In Stockholm, the Swedish bourse continued its slide, with prices down 6.9 percent. Again it was a bank, Swedbank, which suffered most, shedding some 11 percent.
The Arab world's largest bourse, the Saudi stock exchange, resumed trading Monday after the Eid al-Fitr Islamic holiday and its Tadawul All Share Index (TASI) suffered a 9.8-percent drop.
The plunge reflected concerns among investors in the region that the financial crisis could drag on, particularly if the US bailout package failed to achieve its objectives, financial analysts said.