Stocks in the United States plunged on Monday after Standard & Poor's issued its first warning on US debt, citing Washington's looming fiscal deficits.
The ratings agency revised its outlook on US sovereign debt to negative from stable - it's the first time Washington's AAA grading has ever seen such a move.
The Dow Jones Index has shed 180 points, or 1.4%, to 12,161.
The Nasdaq Composite has fallen 40 points, or 1.4%, to 2724.
European stock markets also fell on Monday on fresh worries over the eurozone debt crisis.
The FTSE 100 index in London shed 0.9% to 5939 points, the DAX in Frankfurt lost 1.1% to 7099 points and the CAC-40 in Paris declined 1.3%to 3920.
Shares also fell on Monday in Japan, where the Nikkei index opened in positive territory but losing 0.3%, to close at 9556.
Earlier, the Australian 200 Index closed up 9 points, or 0.2%, to 4861. The NZX 50 closed up 12 points, or 0.3%, to 3465.
The New Zealand dollar was trading at 78.95 US cents, 75.11 Australian cents, 48.58 pence, 65.15 yen and 0.5545 euro. The Trade Weighted Index was at 68.70.
Brent crude oil was trading at $US123.29 per barrel and gold was trading at a fresh high of $US1491.09 per ounce.