European equity markets suffered heavy losses on Monday, with worries about a slowdown in China gathering pace as expectations of further stimulus from Beijing over the weekend failed to materialise.
As index pared their worse intra-day losses, the Stoxx 600 closed down 5.33%, with Germany's DAX down 4.70% and France's CAC 40 shedding 5.36%, to mark their worst performances since 2011.
Chinese stocks plunge
This came after an earlier whopping 8.5% down session on the Shanghai Composite, while the Nikkei 225 tumbled 4.6% and the Hang Seng slumped close to 5%.
Shares in China wiped out all their gains for the year and 600 stocks were suspended after they fell the by the maximum 10% allowed in one session.
"The sea of red on trading screens is reminiscent of the credit crisis, and, like then, tensions are running high. A small stabilisation in the selloff should not be confused for confidence, and traders are not trusting the pullback as it feels like the calm before the next storm," said David Madden, market analyst at IG.
In London, the FTSE 100 hit its lowest level since 2012 before recouping some of the losses, while in the US the Dow Jones Industrial Average plunged 1,000 points at the opening bell, before clawing back half of the day's deficit.
Elsewhere, the euro traded above $1.17 for the first time since January, after gaining over 2% on the greenback. The European currency rose 1.53% against the pound but fell 0.81% against the yen, while Brent crude tumbled 4.92% to $43.33 a barrel.
China fears 'overblown'
However, some analysts insisted the panic over China was overblown and that recent slump was not indicative of China's economic conditions.
"Investors are overreacting about economic risks in China," analysts at Capital Economics said in a note. "The collapse of the equity bubble tells us next to nothing about the state of China's economy.
"In fact, recent data have been more positive than the headlines might suggest, with large parts of the economy still looking strong. Policymakers in China also have the luxury of still being able to loosen policy if necessary."
In company news, amid widespread losses across the board, Spanish renewable-energy Abengoa SA was among the few winners, climbing 3.60%.
Glencore plunged 15.96%, while Berentzen and Epigenomics both plummeted 12%.