European stocks tumbled Monday amid heightened anxiety about the state of the global economy.
"We now believe national recessions in the US and the UK will be deeper and longer than previously forecast," said Larry Hatheway, an economist at UBS in London. "For the first time, we also anticipate recession in the Eurozone."
At about 0815 GMT, the Dow Jones Stoxx 600 Index was down 3.9% at 251.20. In terms of national markets, the U.K.'s FTSE 100 Index was 4.5% lower at 4754.55, while France's CAC-40 Index lost 4.5% to 3898.74. Germany's DAX Index plummeted 4.3% to 5547.98.
In Asia, Japan's Nikkei Index slumped 4.3% to 10473.09. Markets in mainland China, Australia, South Korea, Singapore and Thailand also fell sharply.
Front month Standard & Poor's futures were 2.1% lower at 1085.20.
The U.S. House of Representatives passing the government's $700 billion financial sector bailout Friday failed to lift spirits as investors questioned how the plan will be implemented and how effective it may well be in preventing a global economic recession.
European leaders over the weekend vowed to restore confidence in the markets and to back the bloc's banks, but failed to come up with a E.U.-wide response to the financial turmoil.
Economic concerns were triggered by a U.S. jobs report Friday that showed the U.S. economy shed jobs in September at the highest monthly rate since 2003.
Traders said investors are now counting on interest rate cuts to help alleviate the pain and tension in financial markets. The Bank of England's next decision on rates is due Thursday.
"Expect the markets to pressurize central banks to cut rates aggressively," said one trader based in London.
In terms of stocks, the troubled German mortgage lender Hypo Real Estate Holding AG (HRX.XE) plunged 48% to EUR3.88 after it was bailed out to the tune of EUR50 billion.
BNP Paribas SA (13110.FR) lost 4% to EUR68.51 after confirming it will take over Fortis Group's (30086.AE) Belgian operations, a deal brokered by the Belgian government. On top of this, Italy's Unicredit (UCG.MI) said it would launch a EUR3 billion emergency capital increase.
Elsewhere, Dutch Insurer Aegon (AEG) slumped 13% to EUR5.67 and France's Credit Agricole (4507.FR) shed 8% to EUR14.20.
Mining stocks also came under pressure amid fears that a slowing global economy will eat into demand for commodities.
In London, Rio Tinto (RTP) fell 11% to 3,020 pence, while BHP Billiton (BHP) dropped 9.4% to 1,076 pence.