An eight per cent slump in Deutsche Bank's already battered share price has sent Europe into a fresh tailspin and left world equity markets sliding toward their worst week in three months.
Germany's biggest lender, Deutsche, hit by a string of fines for wrongdoing and a sharp fall in its revenues, saw its shares drop below 10 euros for the first time in its history in a brutal European open.
It followed reports that a number of hedge funds that clear derivatives trades with Deutsche had withdrawn some of their cash and adjusted positions, a sign that counterparties were becoming wary of doing business with it.
The turbulence spilled into currency and bond markets again, too, with the euro falling to a two-month low of 1.081 against the safe-haven Swiss franc and buyers flocked to German government bonds driving down their yields.
As if that wasn't enough, markets were at traditionally illiquid end-of-quarter point and for those investors who run their books September to September it was the even tighter end- of-year crunch time.
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In a sea of red, London's FTSE 100 was down 1 per cent, Germany's DAX and France's CAC 40 both fell 1.5 per cent while banks across Europe were down 4 per cent and almost 6.5 per cent for the week.
Britain's sterling was heading for its fifth consecutive quarter of losses against the US dollar in the currency markets - its worst run since 1984 - as concerns about the UK's Brexit plans, or lack of, have continued to bite.
There were still some positives to hold on to. For the quarter, only two stock markets look to be set for losses - Mongolia and the Philippines.
Latin America, and Brazil in particular, remains the star performer. Sao Paulo stocks have seen another 15 per cent jump this quarter taking their gains for the year to a whopping 62 per cent.
Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan lost 1 per cent. But it is poised for a 1.7 per cent gain in September, and a 9 per cent jump in the third quarter.
A raft of data out of the United States next week is also contributing to market jitters, with the chance of a Federal Reserve interest rate rise in December still seen at around 50-50.
Numbers to watch include September manufacturing and August construction spending data on Monday, non-manufacturing indexes for September and August factory orders on Wednesday and non-farm payrolls for September on Friday.
Japan's Nikkei closed down 1.5 per cent after weaker-than-expected consumption and inflation data. It recorded a loss of 2.6 per cent for the month, but ended the quarter up 5.6 per cent.
While industrial output beat expectations in August, that did little to lift pressure on the central bank to ease monetary conditions further.
Some Bank of Japan board members doubted whether the central bank's overhaul of its massive stimulus program, announced last week, would enhance flexibility of monetary policy, a summary of opinions at the central bank's September rate review showed on Friday.
China's CSI 300 index bucked the regional trend to rise 0.3 per cent, paring losses for the month to 2.1 per cent.
China's factory activity inched up in September, in line with analyst forecasts, but growth was tepid. Output expanded in September but at the slowest pace in three months.
Chinese markets are closed for the National Day holiday all next week.
Oil prices pulled back after rising 7 per cent in two days after OPEC agreed to its first output cuts in eight years.
Even if production is scaled back, some analysts doubted the reduction would be enough to make a substantial dent in the global crude glut.
US crude futures slipped 0.8 per cent to $US47.48. They closed up 1.7 per cent at $US47.83 on Thursday, after climbing to as high as $US48.32, the highest level in almost five weeks. They're on track for gains of 6.2 per cent in September.
