Question marks over the health of French banks sent markets tumbling, with Societe General at the centre of the drama. At one stage the stock plunged more than 20%.
In Europe the FTSE shed 3%, whilst the DAX plummeted 5.1% and the CAC slumped 5.5%.
Stateside, the Dow Jones was smashed to the tune of 520 points (-4.6%), whilst the S&P 500 shed 4.4% and the Nasdaq lost 4.1%.
The losses overnight sent the Dow to its lowest level since September 2010.
The yen gained against the majority of its global counterparts overnight with the US Fed’s pledge to keep interest rates low until 2013 failing to convince investors that global growth will be maintained.
The euro fell against the greenback amid speculation Europe’s debt crisis would spread to France, the region’s second biggest economy.
Oil lost ground overnight, trading as low as US$81.14 a barrel despite the biggest drop in US crude inventories since December.
Elsewhere, gold topped US$1800 an ounce for the first time ever overnight amid speculation that low interest rates and growth in emerging nations will support demand for raw materials.
In company news, TLS announced a FY net profit of $3.23 billion, down 17% from $3.88 billion. The result beat expectations of $3.09 billion.
Today’s session will bring us data in the form of the Melbourne Institute inflation expectations, at 11:00am AEST.
We will also be in receipt of the latest unemployment rate and employment change numbers, slated for release at 11:30am.
The expectation is for the unemployment rate to hold firm, at 4.9%.