Heavy falls on world stock markets showed no signs of abating today, as investors gave their first reaction to Friday's dramatic downgrade of the United States' credit rating by Standard & Poor's.
A further S&P downgrade of US financial institutions linked to the government this afternoon added to the turmoil.
Tonight on Wall Street, the Dow Jones closed down 5.5%, while the Nasdaq dropped 6.9%.
London's FTSE closed 3.4% lower, losing 178 points. This marked the first time in its 27-year history that the index has registered falls of more than 100 points for four trading sessions in a row. The Paris market lost 4.7%, while shares in Frankfurt plunged by 5%. Dublin's ISEQ fell 4.4%.
Earlier, after heavy falls on Asian markets, members of the Group of 20 leading industrialised and developing nations said today they were ready to act together to stabilise financial markets and protect growth.
See the latest developments on world markets here
The G20 finance ministers and central bank governors affirmed a commitment to 'take all necessary initiatives in a co-ordinated way to support financial stability and to foster stronger economic growth in a spirit of cooperation and confidence'.
They said they would stay in close contact in coming weeks 'and co-operate as appropriate, ready to take action to ensure financial stability and liquidity in financial markets'.
The Group of 7 largest economies vowed earlier today to bolster stability and the European Central Bank pledged to 'actively' buy euro zone bonds.
'We are committed to taking co-ordinated action where needed, to ensuring liquidity, and to supporting financial market functioning, financial stability and economic growth,' the G7 statement said.
South Korea's deputy finance minister Choi Jong-Ku said it was premature to talk about concrete, co-ordinated actions that may be taken by the group. 'All market movements need to be monitored very closely at this time,' he said.
Choi said G20 members agreed that the euro zone's latest measures to contain the sovereign debt crisis must be implemented with all speed, while the US told other members that Standard & Poor's initial rationale for the downgrade was based on a miscalculation by the agency.
He said Washington relayed assurances from the other global ratings agencies Moody's and Fitch that they have no plan for a similar downgrade.
