LONDON: Stock markets slid Monday, with Asia taking the heaviest hit, as investors took flight on mounting fears of a sharp global economic slowdown.
Investors shrugged off news that an investigation found no evidence of collusion between US President Donald Trump's election campaign and Russia.
On currency markets, the British pound faced fresh selling pressure with Prime Minister Theresa May's political future hanging in the balance as she looks to push her Brexit deal through parliament for a third time.
"Each week in the Brexit saga promises to be a crunch week, and despite suggestions to the contrary, it seems unlikely that even a promise by the prime frankminister to resign will get her deal over the line," noted IG analyst Chris Beauchamp.
"The country is simultaneously bored of Brexit and desperate for a resolution."
Dealers have meanwhile been spooked by growing evidence of a slowdown, after a broad-based rally since the start of the year that was built on hopes for China-US trade talks and a more dovish Federal Reserve.
"Concerns over the health of the global economy heat up at a rapid pace," said analyst Jameel Ahmad at traders FXTM.
In Europe, London stocks lost 0.6 percent by midday, while Frankfurt and Paris each shed 0.3 percent.
Eurozone losses were capped by the closely-watched Ifo index that showed recovering confidence among Germany's business leaders in March after six months of decline.
- 'Miserable session' -
Tokyo's main stocks index was hammered 3.0 percent, while Hong Kong and Shanghai both dived two percent, as concerns festered also over a possible recession in the United States, dealers said.
"Despite a miserable session for Asia, European markets are managing to avoid heavy losses," added Beauchamp.
"The risk-off mood at the end of last week seemed dramatic, and was perhaps justified given the sudden shift in the economic outlook, but a better reading from the German Ifo index has provided some reason for optimism."
US and European equities had tumbled Friday as the yield on 10-year Treasury bonds fell below those for three-month notes -- the first time this had happened since before the global financial crisis.
This so-called inverted yield curve shows investors are more willing to buy long-term debt -- usually considered higher risk -- as they consider the short-term outlook more risky.
"This development will psychologically encourage further anxiety and rocket fears that the global economy is heading for another downturn, if recent economic releases across the globe have not already The yield curve is closely watched since it has inverted prior to recessions in recent decades.
The rush to the 10-year US bond market followed weak manufacturing data out of the US, eurozone giant Germany and France on Friday.
That came days after the Fed's announcement that it was unlikely to lift interest rates this year owing to unease about the US and global economy.
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