The New Zealand sharemarket plunged in early trading after investors around the world dumped stocks to rush to the security of cash and government bonds.
Equity indexes were hammered to their lowest levels of the year on fears of a spreading debt crisis and slowing growth.
Investors fled Wall Street in the worst stock-market selloff since the middle of the financial crisis in early 2009 in what turned into a full-fledged correction.
In this country, the benchmark NZX-50 index fell to its lowest level since December, and by 10.15am was down 85.38 points, or 2.53 percent, to 3292.4.
Mainfreight was down 25c to 1040, Fletcher Building lost 21c to 780, Xero dropped 15c to 240, Contact Energy fell 12c to 501, Sky TV was down 11c to 565, Steel & Tube dropped 9c to 236, Kathmandu fell 8c to 220, Ryman Healthcare fell 9c to 260, Fisher & Paykel Healthcare dropped 10c to 245, and Telecom dropped 8.5c to 257. Many other stocks fell by amounts between 1c and 5c.
Fears that the euro-zone debt crisis was spiralling out of control had sent European stocks to levels not seen since markets recovered from the financial crisis in mid-2009. Italian equities pushed further into bear market territory -- down nearly 30 percent since February.
In the US, the Dow Jones industrial average was down 4.3 percent at 11,383.98, the Standard & Poor's 500 Index fell 4.8 percent at 1200.13, and the Nasdaq Composite Index lost 5.1 percent at 2556.39.
The S&P 500's drop puts it more than 10 percent below its April 29 high, considered a correction.
Intense selling this week reflects a frustration with politicians attempts to address pressing concerns over high public debt levels in Europe and the United States as large industrial economies show signs of running aground.
"The big catalyst was fear," said Matt Rubin, director of investment strategy at Neuberger Berman in New York.
"People are selling in anticipation of a lousy jobs number and a double-dip recession," he said, referring to the closely watched US payrolls report, which is expected to show another month of sub-par growth in the labour market.
