Global stocks slid lower after both the U.S. Federal Reserve and China signalled that they had no intention of riding to the rescue of the global economy.
Britain's FTSE 100 slid 0.8 per cent, France's CAC 40 fell 1.5 per cent and Germany's DAX lost 0.9 per cent. Japan's Nikkei fell 0.4 per cent, while Hong Kong's Hang Seng lost 0.5 per cent.
U.S. stock futures dipped in and out of the red. Dow futures were down 12 points, while S&P 500 futures edged 0.3 point lower, about two and a half hours before the New York Stock Exchange opened for business.
The Federal Reserve warned on Tuesday Europe's sovereign debt crisis could hurt the U.S. economy but failed to signal that it would take fresh action to stimulate growth.
On Wednesday, China ended its annual policy-setting conference with a series of commitments to deliver economic stability in in the face of an "extremely grim" outlook for the global economy in 2012. It indicated that it would only fine-tune economic policies, rather than swing into an outright monetary-easing mode to shore up growth, which disappointed investors.
The euro hit an 11-month low of $1.3005 (U.S.) as investors also speculated that more euro zone nations may be hit with debt downgrades in the near term.
Investors were edgy after Italy was forced to pay an average yield of 6.47 per cent to get investors to lend it 3-billion euros ($3.95 billion) over five years. The yield was up 0.17 percentage point from the last time Italy looked to raise money over five years and reflected the highest rate since 1997.
In France, Credit Agricole prepared to unveil fresh cutbacks in investment banking, including job cuts and country exits, according to a Reuters report. The French press predicted that between 2,000 and 2,500 jobs would be lost.
Gold fell $31.80, trading at $1,631 an ounce.
U.S. crude oil lost 75 cents, falling to $99.39 a barrel.
The Canadian dollar traded at 96.64 U.S. cents.