Asian shares began the trading day with steep drops, and Russia's markets never opened. At one point, European and U.S. shares appeared to be in free fall Friday afternoon London time, when the Dow Jones index on Wall Street opened a breathtaking 7 percent lower -- below the 8,000 level.
A partial recovery in the U.S. helped European shares recover some ground. Following the Dow's modest recovery, the FTSE ended 381.74 points, or 8.9 percent, lower at 3,932.06, the first time it has ended below the 4,000 level in five years. Germany's DAX ended down 342.69 points, or 7.0 percent, at 4,544.31, while France's CAC-40 was 266.21 points, or 7.7 percent, lower at 3,176.49.
All three indexes had been even lower when Wall Street opened.
In spite of the huge bailout in the U.S., Britain's plan to buy up stakes in troubled banks, coordinated interest rate cuts around the world and massive central bank liquidity provisions, the sell-off in stock markets shows no signs of abating so long as lending rates between banks remain elevated.
That means banks are afraid to lend to each other, and raises the chance that they and other businesses won't get the credit they need to operate.
At the bell, the Dow briefly dipped nearly 700 points, to below the 8,000 point level, amid rising fears of the depth of a global recession before some bargain hunting helped it recoup some losses. By late-afternoon London time, the Dow was 363.28, or 4.2 percent, lower at 8,215.91.
U.S. President George Bush sought to reassure traders. In an address outside the White House, Bush said that there was a concerted effort from around the world to resolve the crisis and restore stability to markets.
Bush said that major Western countries were working together in an attempt to stabilize markets, including coordinated cuts in interest rates.
"Through these efforts, the world is sending an unmistakable signal. We're in this together and we'll come through this together," Bush said.
Should the Dow close lower later, it would mean it has suffered eight days of falls. At present it is on course to have shed 25 percent of its value during the period, the largest since the plunge ending Oct. 26, 1987. That sell-off included Black Monday, the Oct. 19, 1987 market crash that saw the Dow fall nearly 23 percent in a single day.
Smaller markets also took a beating. Trading was suspended at various times in Austria, Russia, Iceland, Romania and Ukraine while Milan suspended share dealings in nearly half of its stocks because of excessive losses.
And the Ibovespa stock index in Brazil was down 6.5 percent at 34,675 at midmorning. Earlier, trading was automatically halted for 30 minutes because of a "circuit breaker" rule that kicks in when the Ibovespa loses 10 percent.
With world stock markets indulging in one of the biggest bouts of sustained selling ever, the focus of attention is firmly on G7 finance ministers as they gather in Washington later.
"Our presumption is that some form of provocative statement must surely be forthcoming as, frankly, anything less may prove calamitous in a market that has failed to find its feet despite previously unimaginable bailout legislation and historic coordination amongst central banks," said Neil Mellor, an analyst at Bank of New York.
The London Interbank Offered Rate, or Libor, for three-month borrowing in dollars has jumped another 0.07 percent to 4.82 percent, two percentage points higher than the rate just a month ago, and despite this week's half point rate cut from the U.S. Federal Reserve and other central banks.
Italian Premier Silvio Berlusconi even raised the prospect Friday that world leaders might consider suspending stock markets in response to the financial meltdown. U.S. and Japanese markets are closed on Monday in case because of public holidays.
The solutions to the crisis will have to be "global and innovative," Berlusconi said. "There is talk of suspending the markets" while international financial rules are "rewritten."
"There must have been moments recently when policymakers wished they could close down the financial machine, as Roosevelt did, as a preliminary to conducting remedial work on it," said Stephen Lewis, an analyst at Monument Securities, refering to 1930s Depression-era President Franklin D. Roosevelt.
"For policymakers, the chief problem in closing the markets would be in knowing how and when to open them again," he added.
In Japan, the benchmark Nikkei 225 index in Japan 881.06 points, or 9.6 percent, to 8,276.43, its lowest closing level since May 2003. It was its biggest one-day percentage loss since the stock market crash of October 1987 and meant that the Nikkei lost nearly a quarter of its value during the week.
In Australia, where the S&P/ASX200 plummeted a record 8.3 percent, market watchers were calling it "Black Friday." Key indexes in Hong Kong, Singapore, the Philippines and India were all down about 8 percent. South Korea's Kospi closed down 4.1 percent, while the Shanghai Composite Index posted a more moderate decline of 2.8 percent.
And in Indonesia, authorities suspended trading indefinitely on the Jakarta Stock Exchange after they had halted trading Wednesday after the index plunged more than 10 percent.
It's not just stocks that are taking a hammering. Oil prices continue to plummet and have fallen to a one-year low below $83 a barrel while the British pound has been sold heavily, falling below $1.70. The Japanese yen and gold remain in demand as safe-haven assets.
