In New York, the Dow Jones Industrial Average fell below the 10,000 mark for the first time since October 2004 while the FTSE 100 in London suffered its biggest one-day points loss ever.

Earlier in Asia, Japan's benchmark Nikkei 225 index plunged 4.3 per cent to a 4?-year low, while other markets such as Jakarta suffered a 10 per cent drop on the day. For the first time since the crisis started, emerging markets bore the brunt of fears. The MSCI Emerging Markets Index slumped 11 per cent, its largest daily decline since 1987.

Robert Zoellick, president of the World Bank, said the crisis in Europe and America could prove a “tipping point” for many developing countries as falling exports and worsening credit conditions triggered business failures and banking emergencies.