A global share sell-off has seen the FTSE 100 slump on the same scale as the day after the Brexit referendum in 2016.
The decline of 3.15%, or 218 points - wiping £56bn off the value of the FTSE's constituent companies - came after the arrest of a top Chinese executive on behalf of the US triggered renewed fears of a trade war.
That helped unleash simmering worries about a broad cocktail of worldwide tensions, including a potential recession in the US, turning trading screens red from New York and London to Paris and Frankfurt.
A slide in the oil price - with Brent crude falling by more than 3% to less than $60 a barrel - also weighed on sentiment.
The market meltdown began after it emerged that Canadian authorities had detained Huawei's chief financial officer Meng Wanzhou in Vancouver, from where she is facing extradition.
Asian markets were the first to take a hit, falling sharply overnight, before the rout extended to Europe.
London's slump was marginally larger than the one-day decline it experienced the day after the EU referendum in June 2016 and was the third worst in the last five years.
It took the blue-chip index to 6,704 points, its lowest level since November 2016 and 1,200 points below the all-time high it reached just seven months ago.
Germany's Dax and the France's Cac 40 saw declines of a similar magnitude.
Wall Street stocks were also sharply lower, with the Dow Jones plunging by nearly 800 points, or 3%, in early trading - though the losses were later pared back and the index finished the session only 79 points off.
In London, financial stocks bore the brunt, with insurance giant Prudential and asset manager Schroders both down 6% while Chilean mining giant Antofagasta led the fallers with a 7% plunge.
:: Huawei CFO Meng arrested in Canada
The arrest of Ms Meng was believed to be related to alleged violations of US sanctions against Iran though there has been no official statement from Washington.
The Huawei executive is also the daughter of Ren Zhengfei, the founder of the communications technology company - China's largest technology firm.
Traders said the development raised fears over US-China relations and added to deepening market worries over higher US interest rates, fears of a US recession and other potential risks to global growth such as Brexit - as monthly data earlier this week pointed to a growth slowdown.
There had earlier in the week been a positive market reaction to the trade war ceasefire, announced by President Donald Trump after talks with his Chinese counterpart at the weekend.
But Tuesday trading saw a massive sell-off on Wall Street as investors pondered whether the truce was being over-played.
Some element of calm was restored in Asia on Wednesday after supportive comments from Beijing - its first reaction to hopes a new trade agreement between the US and China could be reached to prevent steeper tariffs kicking-in on 1 April.
But news of Ms Meng's detention spooked sentiment on Thursday.
Shares continued to dive later despite a statement from China, after the markets had closed there, to confirm that Beijing still planned to "immediately implement" the terms of its trade truce - beginning with farm goods, energy and cars.
US stock markets - which had been closed on Wednesday to mark the funeral of former president George H.W.Bush - then followed Europe into the red.
Ian Williams, analyst at Peel Hunt, said: "Investors are in the mood to accentuate all the negative news at the moment.
"Monday's UK PMI reading showed that Brexit is affecting business decisions, the French are rioting on the streets, Italy's not coming clean on its budget.
"First, we need clarity on all that, but it won't happen before Christmas."
Jasper Lawler, head of research at London Capital Group, said: "Traders have quickly moved out of riskier assets reflecting nerves that the arrest is likely to escalate tensions between the US and China once again.
"The timing of the arrest is key here. Markets are already incredibly nervous over slowing economic growth thanks to the inverted US yield curve .
"Relations between the US and China were supposed to be on the mend after a productive G20.
"However, the arrest has the potential to shatter very fragile US - Sino relations which will weigh further on global trade and growth concerns.
"It looks as though, despite recent heavy selloffs, the bottom is not in sight and the markets have further to fall.
"The big swings of late are representative of a very jittery market."