Global stocks plunged overnight as investors flocked to safety amid looming military action in Syria led by president Barrack Obama.
The U.S., France and Britain stepped closer to a military strike against Syria, laying the legal groundwork to justify action, moving forces into place and rounding up allies in the region.
As a result, European stocks slid the most in nine weeks after U.S. Secretary of State John Kerry said that the Obama administration will hold Syria accountable for using chemical weapons against its own people.
The Stoxx 600 slid 1.8% to 299 at the close of the trading session in London. The FTSE 100 shed 47 points (-0.7%) to settle at 6445 while the German DAX plummeted 193 points (-2.3%) to finish trading at 8243.
Across the Atlantic, U.S. stocks also fell with the S&P 500 dropping the most since June 20, as growing tension over possible military action in Syria overshadowed a report showing consumer confidence unexpectedly rose in August.
The S&P 500 slid 26 points (-1.6%) to close trading at 1630, the lowest closing level since July 3, while the Dow Jones dropped 170 points (-1.1%) to sit at 14776 at the end of the session.
A report from the Fed Bank of Richmond showed that the overall business activity index for mid-Atlantic region, which accounts for 9.1% of gross domestic product, rose faster than estimated last month.
In the commodity markets, crude rose to the highest level in 18 months on speculation that tension in Syria will disrupt Middle East supplies. Crude oil for October delivery climbed $3.09 to $109.01 a barrel on the New York Mercantile Exchange.
Gold climbed to the highest since May as political tension over Syria increased demand for the precious metal as a store of value. Bullion for December delivery climbed 1.9% to settle at $1,420.20 an ounce on the Comex in New York.
In local economic news, the Australian Bureau of Statistics will release its quarterly Construction Work Done report today at 11:30 am.