In the US, the Dow Jones Index lost half a percent, while in Europe, Paris led the falls, down 1.8 percent. Hong Kong and Shanghai markets also fell sharply.
Fears Turkey's currency crisis would affect other emerging markets, amid trade tensions with the US has spooked financial markets. Photo: 123rf
Fears Turkey's currency crisis would affect other emerging markets, higher commodity prices due to the stronger American dollar and a weaker Chinese economy amid trade tensions with the US all spooked financial markets.
Technology stocks were the biggest drag on the S&P 500 and the Nasdaq, with the S&P 500 technology index down 1.1 percent.
In contrast, the NZX Top 50 index was down just eight points this morning.
JP Morgan Chase chief economist Anthony Chan said while the US economy was performing strongly, investors were worried about the rest of the world, particularly Turkey.
The trade fracas heated up as Turkish President Tayyip Erdogan doubled tariffs on some US imports, and China lodged a complaint with the World Trade Organisation against American trade policies.
Equities around the world also took a dive led by emerging market stocks and commodities tumbled as investors looked for safety.
Oil and metal futures fell sharply and the dollar faded after hitting a 13-month high earlier in the day.
While fears of a crisis in Turkey still loomed, China was in sharp focus as the yuan sagged nearly 0.8 percent to 6.9514 per dollar, hitting its weakest level since January 2017.
On top of China's disappointing economic data earlier in the week, technology firm Tencent Holdings Ltd (0700.HK) reported its first quarterly profit fall in nearly 13 years on weak gaming revenue.
MSCI's emerging equities index. MSCIEF fell 1.8 percent after having dropped more than 20 percent from its January intraday high earlier in the day. Latin American currencies also slid.
"A combination of fears of contagion from Turkey and a possibility of a China slowdown has upset markets worldwide. It's more of a risk off trade," said JJ Kinahan, chief market strategist at TD Ameritrade.
