London’s FTSE 100 index has recorded its biggest weekly loss this year after poor manufacturing figures in China exacerbated global economic fears.
The FTSE has fallen 5.2%, or 363 points, since Monday.
On Friday the index closed 2.8% lower, while markets in Paris and Frankfurt saw falls of about 3%.
Shares also plunged on Wall Street, with the Dow Jones, Nasdaq and S&P 500 indexes all down more than 3% by the close.
Only one company on the FTSE 100 saw gains on Friday – Royal Mail, which rose by 1.6%.
The FTSE 100 has fallen for nine sessions in a row, its longest losing streak since 2011. It is almost 13% below an all-time high hit in April.
In the US, the S&P 500 suffered its biggest daily percentage drop in nearly four years on Friday, losing 64.8 points, or 3.19%, to 1,970.89.
The Dow Jones industrial average fell 3.12%, and the Nasdaq dropped 3.52%.
As well as global stock markets, US oil prices also dived on Friday, with New York crude dipping below $40 a barrel for the first time since the financial crisis and marking its longest weekly losing streak since 1986.
Earlier, data from China indicated factory output in August shrank at its fastest pace in more than six years.
The private Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 47.1 from 47.8 in July. A figure below 50 indicates contraction.
The data triggered another sell-off in Chinese shares, which ended the day down more than 4%.
The decline comes on the heels of weaker-than-expected economic data in July, plus this month’s yuan devaluation and a stock market plunge.
Investors are growing increasingly concerned, as the Shanghai Composite index is now down 12% this week.