LONDON - Global markets shuddered again Thursday with bank stocks in particular getting hammered, oil falling further and investors turning to perceived safe havens like gold.
Concerns are growing that the mounting market turmoil could put a brake on the global economy at a time it is already struggling with a litany of issues, includintChina's slowdown, low inflation and plunging energy markets.
At around 8 a.m. Eastern, France's CAC 40 slid 3.6 percent to 3,915, dragged down by a 13 percent drop in the shares of bank Societe Generale, which warned about its profits. Germany's DAX dropped 2.3 percent to 8,811, and Britain's FTSE 100 shed 2 percent to 5,557.
Futures augured sharp losses on Wall Street. Dow futures sank 1.8 percent and S&P 500 futures fell 1.9 percent. The dollar lost 1.8 percent against the Japanese yen.
Investors were not cheered by comments by Federal Reserve Chair Janet Yellen, who on Wednesday cautioned that global weakness and falling financial markets could depress the U.S. economy's growth. That could, in turn, slow the pace of Fed interest rate hikes, she said. But investors appear more concerned about the outlook for growth.
Yellen's second day of testimony before U.S. lawmakers on Thursday will likely remain the point of focus.
"Weakness stems from Fed Chair Janet Yellen warning on current financial market turbulence and suggesting further rate hikes could be delayed, which added to already raised anxiety about the health of the global economy," wrote analysts Mike van Dulken and Augustin Eden of Accendo Markets in a note to clients.
Market sentiment was hit earlier in the day, when some Asian indexes reopened after a holiday and caught up with days of market turmoil. Hong Kong's Hang Seng dived 3.9 percent to 18,546 after opening as much as 5 percent lower. South Korea's Kospi staged its biggest daily drop in nearly four years, down 2.9 percent to finish at 1,862.
Both markets opened for the first time this week after Lunar New Year holidays. China and Taiwan will reopen on Monday. Japan was closed Thursday for a separate public holiday.
Benchmark U.S. crude was down 99 cents to $26.45 a barrel in electronic trading on the New York Mercantile Exchange, a 12-year low. The contract lost 49 cents on Wednesday. Brent crude, a benchmark for international oils, dropped 45 cents to $30.39 a barrel in London.
In currency markets, the dollar took a dive as investors adjusted their expectations for fewer interest rate increases in the U.S. -- a currency tends to weaken with lower rates. It fell to 112.07 yen on Thursday, from 113.35 yen the previous day. It also fell against the euro, which was up to $1.1327 from $1.1282.