Share prices tumbled and key commodity prices surged as the financial markets reacted to the news on Thursday that Russia had launched a full-scale attack on Ukraine.
Germany's DAX index plummeted by more than 4%, diving to around the 14,000 mark.
The FTSE 100 index in London sank by more than 3% to settle at under 7,300.
"Our worst fears have been realized," said portfolio manager Thomas Altmann from QC Partners in Frankfurt. "There is war raging in Europe."
The US markets followed the European slide. The benchmark Dow Jones and Nasdaq both opened over 2.5% down on the previous day's close.
The rout was started in Asia, where stock markets showed heavy losses as news of the invasion broke in the early hours.
In Tokyo, the Nikkei 225 benchmark index ended the day down 1.81%, at 25,970.82 points.
The CSI 300 index of the 300 most important companies from mainland China lost 2.03%, to end the day at 4,529.32 points.
The Hang Seng Index in Hong Kong was down 3.6%, at 22,802.23 points.
In Australia, the S&P/ASX 200 index closed 2.98% lower, at 6,990.63 points.
In Russia itself, the benchmark RTS-Index at one point dropped by nearly half to 610. It then partly recovered to be some 35% down compared to the previous day's close.
Shares in gas giant Gazprom lost about a third of their value.
The Russian rouble meanwhile fell at one point to a record low against the US dollar, losing 6% of its value.
The Russian central bank announced it would intervene in the market to prevent any further decrease in the rouble's price.
The euro also lost ground against the dollar, falling 1.4% to 1.114.
Key commodities such as oil and wheat on the other hand saw sharp price increases during the day.
A barrel (159 litres) of North Sea Brent cost more than $100 for the first time since 2014.
It initially jumped to more than $103, about 6% higher than at the start of the morning's trading.
This brings the increase in the Brent price this year to around 30%, after the price doubled last year.
The price of American West Texas Intermediate (WTI) oil jumped by a similar amount, hitting nearly $100 in trading on Thursday.
The price for a bushel of wheat, meanwhile, rose by more than 5%, to just under 935 US cents on Thursday, the highest level since 2012. Russia is one of the most important producers of wheat worldwide.
The price on the Chicago Commodity Exchange (COBT) had risen by the maximum possible amount of 50 US cents during the morning's trading, said commodities expert Carsten Fritsch from Commerzbank.
The conflict puts double the pressure on wheat, however, as Ukraine is also one of the world's big wheat producers. Together, the two countries account for about a quarter of global trade.
Aluminium prices also surged early on Thursday. On the London Stock Exchange, the price of one ton of the metal rose by 2.9% to $3,388, passing the previous high reached during the economic crisis of 2008.
Natural gas - of which Russia is a major global supplier - is needed for aluminium production.
Gold - regarded as a safe haven investment in uncertain times - saw its price rise towards the $2,000 mark on the London Stock Exchange.
One troy ounce (31.1 grams) was trading at up to $1,974 on Thursday, its highest level since September 2020.
