Shares, private pension funds and oil prices took a battering amid concerns over the slowing Chinese economy, on what became known as 'Black Monday' on the stock markets.
Markets from Shanghai to Paris and New York all slumped in what commentators quickly dubbed 'The Great Fall of China'.
The volatility centres on fears that the world's second biggest economy is slowing.
Investors are concerned that the Chinese slowdown, which has been known for some time, may be worse than thought.
Billions have been wiped from indices across the world. Chinese stocks sank the most in eight years while European shares tumbled across the board.
Exacerbated by a sharp fall in FBD shares, the Irish Stock Exchange, the ISEQ, closed down 5.05pc - its worst performance in five years, when the index dropped 5.78pc on August 24, 2010.
When US markets opened yesterday afternoon (Irish time), the Dow Jones market index briefly plummeted around 1,000 points before clawing back the losses.
But by 8pm Irish time, it was down 3.5pc.
The dollar also fell against the euro, pushing the single currency to a seven-month high.
A senior official with the International Monetary Fund sought to assuage fears by saying a Chinese slowdown does not herald a crisis, but a necessary adjustment for the country.
Seismic financial tremors are not really supposed to happen in August. But, then again, when have economists ever been completely dependable when forecasting? When the bell rang yesterday in New York, the Dow fell a jolting 1,089 points, its biggest ever points drop. One analyst said that US markets were "bordering on the edge of panic" but not quite there yet. He remembered the crash of 1987 and said this didn't feel as bad.