U.S, European and Asian stock markets slide as the relentless slump in oil prices continues to drag on risk assets. Grace Pascoe reports.
They'd made welcome gains on Tuesday but it wasn't to last; Asia shares have plunged to a four year low, with the MSCI index down 3 percent. European stocks followed suit - the FTSE Eurofirst 300 sinking by a similar amount - it's biggest fall this year.
Baader Banks's Stefan Scharffetter said, "If we look at where we stood with the DAX at the end of l ast year, 10,700 points, we are now 9,300 points, I would not call that a hiccup. That is the beginning of a crisis."
Oil fell further - U.S. crude by more than 4 percent - to just above $27 a barrel. The global supply glut is now not the only worry.
Jeremy Batstone-Carr, Chief Economy of Charles Stanley, said the worst may be yet to come. "It is a demand problem too and that suggests to me that whilst we are probably closer to the bottom than we have been, we may not be at the bottom yet."
The IMF - after their revised growth outlook - talked of a market overreaction to oil and China. But some say China doesn't deserve to be made the scapegoat. "China is not the basket case that it is being made out to be," Batstone-Carr said. "I believe that there are far greater concerns in relation to the health of the Japanese economy and also the United States economy. Which to me are being somewhat downplayed."
China markets didn't fall as much as many others - largely because of hopes of more stimulus from the central bank.
That could come before the Lunar New Year in two weeks.