US indices slumped overnight as prospect of politicians at loggerheads over the fiscal cliff continued to worry investors.
The Dow closed 185 points or 1.45% lower at 12,571, while the S&P dropped 1.39% to reach 1,355.
Asian markets were also weak overnight, with the Hong Kong Hang Seng sliding 1.4% to 21,142, although the Japanese Nikkei was 1.9% higher at 8,830 after a slide in the yen offered a boost to exporters.
Meanwhile China’s President-in-waiting Xi Jinping won a strong mandate to lead the world's second-biggest economy and deal with problems ranging from corruption to economic uncertainty.
The FTSE 100 and other major European markets are set to track US stocks lower today as euphoria over President Obama’s re-election victory gives way to uncertainty over the US’ financial strength.
Macro concerns had already weighed on European stocks during yesterday's session, as fears resurfaced over Greece's ability to meet its debt obligations, while workers in Greece, Spain, Italy and Portugal organised a wave of protests against austerity measures.
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