LONDON: World stock markets plunged further on Tuesday as more gloomy evidence emerged of China's economic slowdown, triggering heavy sell-offs from Hong Kong to New York and raising fears of weakening global growth.
Downbeat data showed factory activity in China hit a three-year low, fuelling concern over the health of the world's second largest economy which has been a main engine of economic expansion.
Tokyo stocks tumbled almost four per cent as China woes spread, with Europe's main markets following in its wake by closing down by up to three per cent.
China's statistics bureau said its Purchasing Managers' Index of manufacturing activity came in at 49.7 last month, its lowest since August 2012. A reading below the 50-point mark indicates contraction.
The data sent Wall Street sharply lower in mid-day trade with both the Dow Jones Industrial Average and the S&P 500 index down nearly two per cent, and the tech-rich Nasdaq giving up 1.46 per cent.
Christine Lagarde, head of the International Monetary Fund, also added to the gloom on Tuesday when she warned that global growth this year would be "likely weaker" than previously anticipated, less than two months after the IMF cut its global forecast for 2015 to 3.3 per cent.