THE double whammy of bad economic data from China and news that the United States might ease up on its money-printing programme this year sent investors fleeing for the exits yesterday.
Shares, bonds and key commodities all suffered a pummelling in the massive sell-off that left markets battered and bleeding.
The MSCI Asia-Pacific Index, which tracks regional bourses apart from Japan, was down 3.5 per cent, its biggest one-day drop since November 2011.
Individual markets told a similar story. Singapore's Straits Times Index plunged 2.5 per cent, Hong Kong's Hang Seng and China's Shanghai Composite both lost nearly 3 per cent, and Australia's ASX 200 fell 2 per cent.
There was carnage on Wall Street as well, with the Dow Jones down 1.5 per cent in early trading after tumbling 1.35 per cent on Wednesday.
European stocks sank the most in four weeks, with most key markets falling over 2 per cent, even as the euro dropped sharply against the US dollar.
The main culprit was news that the US Federal Reserve's quantitative easing (QE) programme could be eased or tapered off this year if the economy continues to improve.
"So there you have it - the end of QE is nigh," said Mr Joshua Tan, research head of Phillip Securities. Bank of America Merrill Lynch noted: "Risk of QE tapering has raised the risk of a 'sudden stop' in capital inflows."
Those inflows - to the tune of billions of dollars - have ignited Asian share and bond markets over the past 18 months, so the very real prospect of the tap being turned off caused the inevitable panic yesterday.