Europe joins global stock selloff after Asian 'panic selling'

STORY: European stocks joined a global selloff Monday - but in calmer fashion than Asia.

London’s FTSE index lost around 2% from the open.

The pan-European STOXX index slid a little more.

Significant falls - but minor compared to the day of turmoil in Asia, where Japan’s Nikkei index closed down 12.4%.

That was its worst one-day decline since 1987.

South Korea’s Kospi index fell close to 9%, while shares around Asia outside Japan lost a milder but still painful 4.2%.

Hirofumi Kasai is senior strategist at Tokio Marine Asset Management:

"I think there is a sense of panic selling. The trigger was concerns over the U.S. economy, and prospects of interest rates rising in Japan after a more than expectedly hawkish tone from Bank of Japan Governor Ueda's news conference last week."

The stock tailspin set in last week, after some worse than expected employment data in the U.S.

That fuelled fears that the country could be headed for a recession, and spurred bets on rapid-fire rate cuts.

Analysts at JPMorgan now say there’s a 50% chance of recession in the country.

The stock selloff saw money flow into perceived safe-havens instead, with the Japanese yen and Swiss franc both soaring.

U.S. and Japanese benchmark government bonds also saw strong demand, with yields tumbling.

Adding to the gloom were weekend results from Warren Buffett’s Berkshire Hathaway, which suggested the legendary investor has gone sour on stocks.

He appears to have offloaded much of his holdings, including around half of his big stake in Apple.

Investors saw a sign that Buffett is now wary about U.S. economic prospects, or sky-high stock market valuations - or maybe both.