The global stock market rout of recent weeks has returned with a vengeance after US efforts to bolster confidence in the response to the coronavirus crisis only added to the sense of panic among investors.
America's central bank, the Federal Reserve, slashed its benchmark interest rate to near zero overnight in an attempt to help the US economy come through the COVID-19 outbreak.
The Fed also said it would expand its balance sheet by at least $700bn (£565bn) in the coming weeks to help stabilise market confidence.
After falls in Asia, The FTSE 100 in the UK was trading 7.5% down by lunchtime - with airlines and holiday firms leading the fallers following a slew of announcements relating to the grounding of planes and warnings that the industry will need the support of governments globally to survive the crisis intact.
Sky's business presenter Ian King said the US Fed move was "very, very unexpected timing but the markets were pricing in another rate cut".
He added: "I think it has just spooked the markets, made people think: crikey, what does the Fed know that we don't?
"Accordingly, you've seen this monstrous sell-off in all asset classes, bonds excepted."
Germany's benchmark DAX was down by 8%, France by 9.5% and Italy has fallen 8.5%.
Andrew Bailey, who today replaced Mark Carney as Bank of England governor, said the bank was "very keen" to ensure short-term damage to the economy did not permanently impair Britain's longer-term growth.
"That's why you saw prompt action last week, that's why you will see prompt action again when we need to take it, and the public can be assured of that," he said.
Mr Bailey said the move on Sunday by six central banks, including the BoE, to inject cheap US dollar funds to the financial system was in response to some "pretty big dislocations" in markets.
"We're going to see how that works its way through the markets today (and) in the coming days to see what the effect is, but I would emphasise that this is strong coordination among central banks."
Malaysia's benchmark index slid 3.4% to near a 10-year low after the country's prime minister said the tourism sector had probably suffered nearly $800m (£647m) in losses to the end of February because of the virus.
In the Philippines, shares started to rebound after losing as much as 7.6% in early trading but they were still in the red.
Singapore fell 3.4%, set for a fourth consecutive day of losses, and Indonesian stocks were down by 4%.
Sydney's benchmark fell 7%, Hong Kong's Hang Seng lost 2%, Shanghai was down 0.5% and Tokyo was flat.
On Wall Street, futures for the benchmark S&P 500 index fell 5% on Sunday night and triggered a halt in trading.
Vishnu Varathan, a senior economist at Mizuho Bank, said: "Ironically, markets might have perceived the Fed's response as panic, feeding into its own fears.
"Despite whipping out the big guns (and jumping the gun) the Fed appears to lack the silver bullets; falling short of being
the decisive backstop for markets."
China said industrial output had contracted at its sharpest pace in 30 years during the first two months of the year.
It has seen the bulk of infections and deaths as a result of COVID-19 and is just starting to get its outbreak under control, following months of lockdown in many of its cities.
Earlier, US President Donald Trump said the Fed's decision, which cuts the rate by a full percentage point to a target range of 0% to 0.25%, was "very good news".
The US central bank said that rate would remain until it feels confident the economy has weathered recent events.
It has also dropped its requirements that banks hold cash reserves in another move to encourage lending.
Other central banks around the world, including the Bank of England, have said they would co-ordinate to ease liquidity in an attempt to blunt the economic impact of the virus.
A statement from the governor of the Bank of England, Mark Carney, and incoming governor, Andrew Bailey, said such action would "improve global liquidity by lowering the price and extending the maximum term of US dollar lending operations".
They added: "These new operations will help ease strains in global funding markets, thereby supporting the supply of credit to households and businesses."