World stock markets plunged again on Thursday as another wave of anxiety spread from investors in Asia to Europe and led to further sharp losses in the United States. Wall Street opened lower, mirroring a plunge on European markets and another day of steep falls in Asia.
"There continues to be a lot of nervousness around the stock market," Barclays Stockbrokers analyst Henk Potts said in London on Thursday.
"There's a big debate going on about how quickly the US economy is slowing down," he said, adding that investors remained worried about the stock market slump in Asia.
US-based Briefing.com market analyst Dick Green added: "Right now, everything and anything is viewed in a negative light."
The Dow Jones Industrial Average sank 1.34 percent to 12,104.80 minutes after the opening bell, while the tech-laden Nasdaq composite fell 1.79 percent to 2,372.96.
The broad-market Standard and Poor's 500 index lost a 1.44 percent to 1,386.59.
In mid-afternoon trading in Europe, London's FTSE 100 index slid 1.05 percent to 6,106.50 points. Frankfurt's DAX 30 shed 1.71 percent to 6,600.62 points and in Paris the CAC 40 dived 1.89 percent to 5,411.85.
Earlier on Thursday all three European markets had risen following two days of heavy falls that were linked to concerns about slowing economic growth in the United States and a possible overheating on the Chinese stock market.
On Tuesday, US stocks had their worst downturn since the aftermath of the September 11, 2001 attacks, while the Shanghai stock exchange had its biggest fall in a decade on the same day.
Asian investors had been in a state of high tension on Thursday as the aftershocks from this week's plunge reverberated around the region, pushing Tokyo and Shanghai back into negative territory.
"Investors are still wondering if the storm is actually over or not," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities in Tokyo.
"Aftershocks in some markets, where prices are overvalued, may be seen from now on. Volatile and sensitive trading is likely to continue at least until mid-March," he said.
Chinese share prices closed with a fall of 2.91 percent on Thursday as jittery investors sold blue-chip holdings.
Analysts said investors in China remained concerned that stock valuations were still too high despite prices falling 8.84 percent on Tuesday.
In Tokyo the benchmark Nikkei-225 index closed down 0.86 percent as an overnight rebound on Wall Street helped to reassure nervous investors after the index slumped 2.85 percent on Wednesday.
Hong Kong was also down almost one percent in late trade and Sydney ended 0.38 lower, while New Zealand shares eked out a gain of 0.29 percent and Manila closed up 4.0 percent.
"I don't think people are panicky but they're nervous the correction may have further to go," said Ric Klusman of Aequs Securities.
Federal Reserve chairman Ben Bernanke told US lawmakers on Wednesday that financial markets were functioning "well" and "normally."
Despite the fresh losses in parts of Asia, many market watchers remained optimistic that the worst of the recent rout would soon be over.
"The impact of the global stock slump is expected to wane soon as a lot of players still bet that this is a temporary phenomenon," said Kenichi Azuma, a senior broker at Cosmo Securities.
"Investors are taking their time to consider which shares they should buy back at the bottom," he added.
In European foreign exchange trading, the euro held around 1.32 dollars.
The dollar fell to 117.57 yen before the release of US manufacturing data later Thursday.
