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The declines came after Morgan Stanley warned that the US and Europe were both "dangerously close" to slipping into a recession and after Asian stocks struggled overnight.
Japan's Nikkei 225 fell 2.5 per cent while the South Korean Kospi plummeted 6.2 per cent.
The DAX dropped 3.16 per cent this morning, while the FTSE index and the CAC dropped 3.1 per cent and 1.9 per cent respectively.
Chou Chong of Aberdeen Asset Management told the BBC: "The Western regions are having to face a period of lower growth and dampened demand. That is putting pressure on market sentiment."
Yesterday, Morgan Stanley announced that it has cut next year's world growth forecasts for nearly every economy in the world, prompting fears that there could be a double-dip slowdown in economic growth.
Posted by Greg Secker
