Global investors grew skittish yesterday as concerns about reduced central bank easing and slower growth in China rattled Japan and other markets that have registered big gains this year on the back of loose monetary policies.

Trading was marked by a dramatic rise in volatility and big swings in prices. Japan’s Nikkei 225 index suffered the worst losses, dropping more than 7 per cent, while European equities registered their largest daily loss in nearly a year. Wall Street opened 1.2 per cent lower, before trimming losses later.

The swing in sentiment marked the first big interruption to what has been a prolonged period of rising stock markets since November, when the Bank of Japan joined the US Federal Reserve in an aggressive stimulus effort that has benefited equities, lower quality corporate debt and real estate.