European stock markets opened mostly flat, before following their Asian counterparts into negative territory Tuesday, after an overnight turmoil saw Japanese stocks plunging and investors scrambling toward safe assets.  Traders have been spooked by persistently low oil prices, concerns over a slowdown in China and uncertainty over whether the U.S. Federal Reserve would hike interest rates further.

The pan-European Stoxx 600 dropped 0.9 percent during early trade, while the Stoxx 50 index of leading European shares fell 0.55 percent. The U.K.’s FTSE 100, Germany’s DAX and France’s CAC 40 were all trading lower, underscoring renewed jitters about the global economy.

Shares of European banks, which have borne the brunt of a selling pressure in Europe in recent days amid worries over their ability to deal with a gloomy global economic outlook, were also down Tuesday. German lender Deutsche Bank, which on Monday tried to reassure investors it had sufficient cash to pay its riskiest debts, was trading down 0.4 percent, while shares of the French banking giant BNP Paribas fell over 2 percent.

“Much has been made of the demand for credit default swaps protecting against future default in the European banking space,” Chris Weston, chief market strategist at the spread better, IG, reportedly said. “Rightly so, when Deutsche Bank has been sold off 58 [percent] from its 2015 high and left with a market capitalization of 21 billion euros. Given they have 54 billion euros in bonds maturing over the next two years and much of their existing funds tied up as regularity capital, things don't look hugely sustainable.”

U.S. stock futures were also down over 0.5 percent Tuesday. However, changes in futures aren’t necessarily reflected in the market when it opens.

Earlier, stocks in Japan fell to their lowest levels since 2014 and the yield on the benchmark 10-year Japanese government bond dropped into negative territory for the first time as investors fled to safety.

Japan’s Nikkei 225 Index closed down 5.4 percent, weighed down by, among other things, a stronger yen, which makes Japanese exports less competitive.

Meanwhile, markets in China, South Korea and Hong Kong remained closed Tuesday for the weeklong Lunar New Year holiday.