Downbeat data showed factory activity in China hit a three-year low, fuelling concern over the health of the world's number two economy.
Tokyo stocks tumbled almost four percent as China woes spread, sending major European bourses sliding by around two percent in late morning deals.
China's statistics bureau said its Purchasing Managers' Index of manufacturing activity came in at 49.7 last month, its lowest since August 2012. A reading below the 50-point mark indicates contraction.
The key indexes are seen as barometers of the economic health of Asian giant, which has been a major engine of global growth.
More From This Section
Frankfurt, London and Paris were also pulled sharply lower on Tuesday by declining domestic manufacturing figures.
"Another set of disappointing Chinese manufacturing data has prompted (losses) for UK and European stocks on Tuesday with a slowdown in Europe's own manufacturing sector exacerbating the declines," added CMC Markets analyst Jasper Lawler.
Global equities -- hammered last week on worries that the flagging Chinese economy would spark a new global recession -- also fell yesterday over the uncertain outlook for US interest rates before a closely watched jobs report due on Friday.
"Investors are concerned about the strength of the global economy, which is why you're seeing a sell-off in various stock markets," said strategist Ayako Sera at Sumitomo Mitsui Trust Bank Ltd. In Tokyo.
The Shanghai stock market ended down 1.23 per cent today, having tumbled by more than four percent at one point -- after the downbeat data.
Tokyo dived 3.84, with a stronger yen hitting exporters, while Sydney fell 2.12 per cent and Hong Kong finished 2.24 per cent lower.