Stocks fell around the globe on the first trading day of 2016.
In Asia, China's Shanghai Composite Index plunged 6.9 percent to its lowest level in nearly three months. This triggered the "circuit breaker" mechanism newly effective from 2016, which halted trade for the remainder of Monday.
Then Europe markets reported heavy losses. Frankfurt posted a diving of 4.3 percent, while Milan lost 3.2 percent, and Paris, 2.5 percent. London shed 2.4 percent.
In the US markets, the Dow Jones industrial average sank about 1.6 percent, the Standard & Poor's 500 index lost 1.5 percent, and the Nasdaq composite lost more than 2 percent.
Analysts say the heavy drops in global markets was due to new fears of a Chinese economic slowdown and more turmoil in the Middle East.
"Well the Chinese market, the Shanghai index closed down 7 percent and there are a number of factors going on there. There was a market economic manufacturing report that showed a decline in the manufacturing index in China for the tenth consecutive month," said Tim Anderson, Managing Director, TJM Investments.
"The conflict between Iran and Saudi Arabia has a great impact on us. Saudi Arabia is our most important ally (in the region), the most important ally of the United States, and the only country in the region with a stable government," said Fidel Helmer, capital markets expert, Hauch & Aufhaeuser.
"And if that government is also being thrown into the crisis, then it certainly will have negative effects on Europe"