The main UK index dropped more than 10% in its worst day since 1987. In the US, the Dow and S&P 500 were also hit by their steepest daily falls since 1987. The declines came despite actions by the Federal Reserve and European Central Bank to ease financial strains.

At the start of US trading, plummeting shares triggered an unusual automatic suspension in trading for the second time this week. When trade resumed 15 minutes later, shares continued to fall, taking cues from the slide in European markets.

The S&P 500 fell 9.5% and the Nasdaq ended 9.4% lower, while losses on the UK’s FTSE 100 wiped some £160.4bn off the market. In France and Germany, indexes cratered more than 12%.

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“Markets are at a breaking point,” said Neil Wilson, chief market analyst at Markets.com. “No one knows what a total economic shutdown, however temporary, looks like.” The declines came after the US restricted travel from mainland Europe. Losses on European indexes accelerated after the eurozone’s central bank failed to cut interest rates, although it did pledge fresh stimulus measures. The New York branch of the Federal Reserve said it was pumping $1.5tr to ease strains in the debt markets, offering increased overnight loans to banks and expanding the kinds of assets it will buy to keep firms lending.

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