Market Shockwaves Spread Over Fed Tapering
Global markets have reacted quickly to news that the US Federal Reserve would taper its monthly quantitative easing by another $10bn (£6bn).
Equities hit a 10-week low on fears of more emerging markets weakness, as investors headed towards the safer bond market.
Britain's FTSE 100 fell in early trading, the seventh time in eight sessions, and veered towards its lowest level since mid-December.
Problems in numerous emerging markets adversely affected investor sentiment.
Europe's main markets were also down as were shares in China and Japan.
Hong Kong shares ended close to a five-month low, on the back of the Fed decision and a survey of lower factory output in mainland China.
Turkey said it would not implement any sort of capital controls as it battles to defend the lira, amid capital flight, just days after it increased its base rate 5%.
But Prime Minister Tayyip Erdogan said an "out of the ordinary" economic reform might be brought into action.
India announced it would act quickly to ensure financial stability after the Fed cut.
"Both the government and the Reserve Bank of India will continue to remain vigilant and will take whatever steps are necessary to ensure that there is stability in the financial markets," the finance ministry said.
Meanwhile, Argentina continues to suffer from a sliding currency.
The peso has dropped around 15% against the dollar in recent days and inflation hovers at 30%.
Argentinians are increasingly hoarding dollars, stockpiling consumer goods or putting savings into property.
The shockwaves have spread after the second month of Fed reducing the bond-buying and growth stimulus, to help keep pressure on domestic interest rates.
In the US, shares dropped in after-hours trading while oil prices remained flat as the quantitative easing reduction offset a drop in heating oil supply. Fracking-sourced natural gas has soared in its place.
The Fed purchases now stand at $65bn (£40bn) a month and it said "growth in economic activity picked up" since its December meeting.
The US overnight interest rate was kept static on Wednesday night at the historic four-year low of 0.0%.
The decision for the continued tapering was approved by outgoing Fed chairman Ben Bernanke, who is replaced by Janet Yellen after he steps down later this week.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.