London: Stock markets slid on Monday, with Asia taking the heaviest hit, as investors took flight on mounting fears of a sharp global economic slowdown.
Investors shrugged off news that an investigation found no evidence of collusion between US President Donald Trump´s election campaign and Russia.
Dealers have been spooked by growing evidence of a slowdown, after a broad-based rally since the start of the year that was built on hopes for China-US trade talks and a more dovish Federal Reserve.
"Concerns over the health of the global economy heat up at a rapid pace," said analyst Jameel Ahmad at traders FXTM.
Wall Street stocks declined about 20 minutes into trading, the Dow Jones Industrial Average stood at 25,427.59, down 0.3 percent.
The broad-based S&P 500 also shed 0.3 percent to 2,791.91, while the tech-rich Nasdaq Composite Index dropped 0.5 percent to 7,604.67.
Investor sentiment remained cautious after a series of weak economic reports led to a global rout on Friday, with major US indices losing more than one percent.
Trump hailed the long-awaited finding by Special Counsel Robert Mueller that no member or associate of the campaign conspired or coordinated with Russia in its plot to boost Trump in the vote more than two years ago.
The report seems to remove a cloud hanging over Trump´s presidency and is expected to largely silence talk of impeachment in the near-term, although other investigations are ongoing.
The markets have largely shrugged off the Trump Russia probe for most of his presidency, suggesting that Mueller´s findings would have had to have been devastating to move stocks.
"We have rarely if ever commented on the investigation as it has never been seen as a market moving event," said Art Hogan, chief market strategist at National. "We do not see that changing with the release of the findings."
In Europe key stock markets were lower, with London the weakest performer, while Wall Street also got off to a softer start.
Eurozone losses were capped by the closely-watched Ifo index that showed recovering confidence among Germany´s business leaders in March after six months of decline.
Tokyo´s main stocks index was hammered 3.0 percent, while Hong Kong and Shanghai both dived two percent, as concerns festered also over a possible recession in the United States, dealers said.
"Despite a miserable session for Asia, European markets are managing to avoid heavy losses," noted IG analyst Chris Beauchamp.
"The risk-off mood at the end of last week seemed dramatic, and was perhaps justified given the sudden shift in the economic outlook, but a better reading from the German Ifo index has provided some reason for optimism," he added.
Hong Kong and Shanghai both closed two percent off, while Sydney shed 1.1 percent, Singapore dropped 1.4 percent and Seoul sank 1.9 percent. There was also heavy selling in Wellington, Manila, Taipei and Jakarta.
US and European equities had tumbled Friday as the yield on 10-year Treasury bonds fell below those for three-month notes -- the first time this had happened since before the global financial crisis.
This so-called inverted yield curve shows investors are more willing to buy long-term debt -- usually considered higher risk -- as they consider the short-term outlook more risky.
"This development will psychologically encourage further anxiety and rocket fears that the global economy is heading for another downturn, if recent economic releases across the globe have not already provided indications that the downturn has arrived," added analyst Ahmad.
The yield curve is closely watched since it has inverted prior to recessions in recent decades.
The rush to the 10-year US bond market followed weak manufacturing data out of the US, eurozone giant Germany and France on Friday.
That came days after the Fed´s announcement that it was unlikely to lift interest rates this year owing to unease about the US and global economy.
On Monday, a survey by the National Association for Business Economics found US economists were growing increasingly concerned about the US outlook, cutting their growth forecasts and warning that the chances of recession were increasing.
On currency markets, the pound was facing pressure with Prime Minister Theresa May´s political future hanging in the balance as she looks to push her Brexit deal through parliament for a third time.
She has been given until April 12 by EU leaders to win backing for the agreement or find a viable alternative that could include a lengthy extension to the final divorce.
However, there are reports that members of her own cabinet are plotting to oust her and were planning to confront her at a crucial meeting later on Monday.
On oil markets, the prospect of a global slowdown dug into prices, with both main contracts extending the losses of more than one percent suffered on Friday.