Financial market turmoil spread around the world on Thursday as investors fled Asian and European stocks and risky currency trades and sought the safety of short-term US government debt.

The day began with Asian markets plunging after Wednesday’s late sell-off in the US. Europe followed Asia lower, with the FTSE 100 shedding 4.1 per cent. US stocks, however, rebounded from early losses to close mixed. The S&P 500 index ended 0.3 per cent higher, powered by a late rally in financial stocks.