Stock markets across the world went into a tizzy today after reports of escalating tension in the Korean peninsula battered investor sentiment, pushing most of the Asian and European indices into the red.
The Irish debt crisis, coupled with concerns about the financial health of countries such as Portugal and Spain, added to the investor gloom.
Stocks in Asia tumbled as much as three per cent, while European stocks were down one per cent in afternoon trade.
The news of North Korea and its neighbour South Korea exchanging fire rattled markets in Asia, with Hong Kong's benchmark Hang Seng shedding about 3 per cent to end at 22,896.10 points.
China's key Shanghai SE Composite slumped two per cent to 2,828.28 points and India's 30-share Sensex fell 1.33 per cent to 19,691.80 points.
The rising tensions with its neighbour pulled down South Korean benchmark Kospi index one per cent to 1,928.94 points. Singapore market too felt the tremors, as the Straits Times Index tumbled two per cent to 3,126.30 points.
European markets opened amid negative cues, as worries about debt turmoil in the region as well as the Korean tension weighed heavily on investors.
London Stock Exchange's FTSE 100 declined nearly one per cent to 5,643.42 points. France's key index Cac 40 too shed about one per cent to 2,784.85 points while German index Dax was marginally down at 6,808.48 points.
Even though international lenders and European majors have come forward to help Ireland, there are increasing concerns on the debt contagion spreading to other countries in the region.
Market observers said the hostilities in the Korean region would add to the uncertainty in global markets, which are already grappling with a fragile world economic recovery.
