World stock markets continued a week-long sell-off yesterday as the threat of a US government shutdown and further hikes in US borrowing costs compounded investor anxiety that global economic growth is slowing.

MSCI’s index of global equities fell 0.5 per cent, dragged down by broad declines in Europe and Asia. On Wall Street, US stocks initially moved higher after Commerce Department data showed the US economy is on pace to grow by three per cent this year but pared their gains and then turned lower.

The Dow Jones Industrial Average fell 101.31 points, or 0.44 per cent, to 22,758.29, the S&P 500 lost 18.8 points, or 0.76 per cent, to 2,448.62 and the Nasdaq Composite dropped 124.61 points, or 1.91 per cent, to 6,403.80.

Investor sentiment remained cautious. The Nasdaq has shed 19.5 per cent from its August peak, just shy of confirming a bear market, while broad stock markets in the US and Europe are on pace for the worst quarter since the 2008 crisis.

Oil prices, which slid just over four per cent on Thursday, tumbled to their lowest since the third quarter of 2017. US crude fell one per cent to $45.44 a barrel, while Brent fell 2.3 per cent to $53.10.

Japan’s Nikkei lost 1.1 per cent to close at its lowest since mid-September last year, after giving up 5.6 per cent this week. Australian stocks slipped 0.7 per cent, hovering just above a two-year trough hit earlier in the session.

The mood change has triggered a rush out of crowded trades, including massive long positions in US equities and the dollar and short positions in Treasuries.

Lipper data on Thursday showed investors pulled nearly $34.6 billion out of stock funds in the latest week and were heading for a record month of net withdrawals.

Benchmark 10-year Treasury notes last fell 2/32 in price to yield 2.7938 per cent, from 2.789 per cent late on Thursday.

The dollar index rose 0.53 per cent, with the euro down 0.45 per cent to $1.1392.