Japan and Australia stocks slumped early Tuesday as rising fear about the global economy and financial markets made investors switch to safe haven assets, pushing gold to $1,200 per ounce for the first time since June. China and some other Asian markets remained closed for Lunar New Year holidays.

Japan's Nikkei 225 fell 4.3 percent, Australia's ASX 200 2.3 percent.

In the U.S., the Dow Jones Industrial Average, Standard & Poor's 500 and Nasdaq Composite fell 1.1 percent to 1.8 percent. In Europe, Britain's FTSE 500, France's CAC 40 and Germany's DAX declined 2.7 percent to 3.3 percent. Banks led the drop, with Deutsche Bank falling 9.5 percent amid concern about its ability to pay some debt, Bloomberg and Reuters said.

Some traders and investors believe the financial market turmoil since the start of the year is feeding itself, with some players dumping stocks for safe haven assets, pushing gold to a seven-month high.

The turmoil was fueled by the drop in oil prices and the related slowdown of China's economy, together dimming the outlook for energy producers and the many industries that supply energy producers and China. Reuters said Japan's surprise reduction of interest rates to below zero last week, raised speculation that governments and central banks are running out of options.

"The 'fear factor' in markets has morphed from being about an emerging market hard-landing and collapsing oil prices to being about the extent of the slowdown in the developed world and the ability of central banks to reflate asset values yet again," Citi analysts said in a note to clients, as Reuters reported.

Aside from China, Hong Kong and Taiwan, South Korea, Malaysia and Singapore remain closed for the New Year holiday.

“The Asian equity cash market open promises to be a pretty ugly time and those off celebrating Lunar New Year will be happy their markets are closed,” said Chris Weston, chief markets strategist in Melbourne at IG Ltd., as Bloomberg reported. He said Asian stocks may fall some more. “Until that comes there will be no clarity, absolutely no confidence and a bucket load of concern. It almost feels as though the markets are pushing central banks into some kind of action, but they don’t know exactly what it is they want.”