It followed a similar pattern in Asia, where Japan's Nikkei 225 share benchmark plummeted as much as 7.1% and Hong Kong's Hang Seng index took a 4.4% hit.
U.S. stock markets dived by 2% on opening on Tuesday but entered positive territory just minutes later.
The global equity sell-off has been building since last Friday when traders became spooked by the prospect of tighter monetary policy after the U.S. posted strong average earnings data.
Britain's blue-chip index has posted a hefty fall in today's trading, extending the previous sessions' losses, with investors around the world shunning equities amid inflation concerns.
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The market's slump began on Friday as investors anxious that creeping signs of higher inflation and interest rates could derail the market's record-setting rally.
The pan-European FTSEurofirst 300 index .fteu3 lost 2.50 percent and MSCI's gauge of stocks across the globe .miwd00000pus shed 1.22 percent. Like other commodities, oil is priced in dollars making it more expensive when the U.S. currency appreciates.
Brent crude prices were bucking the market trend, trading around 0.3% higher at 67 United States dollars per barrel.
Neil Wilson, senior markets analyst at ETX Capital, said of opening on Wall Street: "The valuations were certainly looking attractive on a forward earnings basis, providing attract entry points for a number of stocks". It ended the day 2.6% - or 193 points - down at 7141.
The S&P materials index .splrcm , up 1.2 percent, led the advancers, while the utilities index .splrcu , down 2.2 percent, led decliners. This increases costs for businesses and households, ...