UPDATE: 7:41 a.m. EST  Stocks across European indexes and U.S. stock futures slipped further Thursday after Asian bourses saw a sell-off, as investors grew concerned over comments from U.S. Federal Reserve Chair Janet Yellen who acknowledged a day earlier that the global economy is facing challenges.

The CAC 40 was trading down 3.91 percent while Germany's DAX was down 2.46 percent. London's FTSE 100 fell 2.14 percent while the pan-European Stoxx 600 was down 3.1 percent.

In the U.S., stock futures on the S&P 500 were down 2.01 percent and those on the Dow Jones index were down 1.97 percent. Nasdaq stock futures were down 2.27 percent.

Meanwhile, U.S. Treasurys soared as the 10-year yield fell to 1.56 percent. Oil also plunged Thursday to lows not seen since 2003, with Brent crude prices down 1.6 percent to $30.34 and West Texas Intermediate, the US benchmark, fell 3 percent to $26.55.

Original story:

Hong Kong’s markets went into a downward spiral Thursday as investors sparked stock selloffs to reduce the parity between global stock markets and Hong Kong’s index, which opened after a three-day holiday at the start of the Lunar year.

Hong Kong’s benchmark index, the Hang Seng, dropped more than 4 percent in the first 5 minutes after it opened Thursday — its worst start to the Lunar year since 1994 — with China-related stocks, energy companies and banks facing the worst of the losses as investors retreated to the safety of the Japanese yen, top-rated bonds and gold.

Investors were worried about declining commodity prices, capital outflows spurred by currency fluctuations and the impact of China’s economic slowdown on the world economy, Chow Chung Kong, chairman of Hong Kong Exchanges and Clearing told the South China Morning Post.

In other parts of Asia, markets were down as Japan’s Nikkei 226 closed 2.31 percent lower and South Korea’s Kospi index fell 2.93 percent. India’s S&P BSE Sensex was down 1.71 percent. Chinese stock markets were closed Thursday as part of its five-day long New Year celebrations.

"There is very little good news and continuous bad news and this is a test of market confidence," Charles Li, chief executive of the Hong Kong Stock Exchange, reportedly said.

The slump started Wednesday when Janet Yellen, the U.S. Federal Reserve head, acknowledged that the global economy is facing challenges, which led to a late sell-off on Wall Street and spread to Asian and European markets Thursday.

European stocks slumped along with Asian stocks Thursday, opening sharply lower with shares in France off the most. The CAC 40 was trading down 3.85 percent while Germany's DAX was down 2.76 percent. London's FTSE 100 fell 2.41 percent while the pan-European Stoxx 600 was down 3.31 percent.

In the U.S., stock futures on the S&P 500 and Dow Jones index were down 1.8 percent while Nasdaq stock futures were down 2.06 percent.

"I think this is going to be a difficult year for investors and even a fledgling U.S. economic recovery looks to be snuffed out by global markets developments," Nitin Dialdas, chief investment officer at Mandarin Capital in Hong Kong, told Reuters.