An abrupt global sell-off in equities, bonds and commodities yesterday has fuelled fears that the world is entering a fresh phase of financial turbulence as the US Federal Reserve prepares to ease its large-scale asset purchases.

Emerging markets were among the worst hit in volatile trading after Ben Bernanke, Fed chairman, on Wednesday set out the case for slowing the pace of QE3 this year as the US economy picks up momentum. As the dollar strengthened, gold prices tumbled by as much as 4.8 per cent to a two-and-a-half-year low. Oil fell 3.3 per cent.

Yields on 10-year US Treasuries, which move inversely to prices, hit 2.47 per cent at one point – up from a low of 1.61 per cent last month – although a steep fall in US equity prices later encouraged a move back into government debt.