Global equity and commodity prices plunged on Monday as fears of recessions across the Northern Hemisphere caused panic selling by investors. Despite the US credit rating downgrade, the US dollar index and US bond prices rose.

Finance Ministers and Central Bank Governors from G20 nations have affirmed ´´our commitment to take all necessary initiatives in a coordinated way to support financial stability and to foster stronger economic growth in a spirit of cooperation and confidence.´´

European shares fell to two-year lows on fears that US and European nations could slide back into recession. At the start of session, bourses stabilised in response to a decision by European Central Bank to buy Spanish and Italian bonds but investor confidence then dried up. The FTSEurofirst index fell by 4.0pct while the German Dax was down by 5.0pct and the UK FTSE lost 3.4pct.

US sharemarkets slumped on Monday with key indices closing at session lows. The Dow Jones fell by almost 635pts or 5.6pct with the S&P 500 down by 6.7pct and the Nasdaq fell by 174.7pts or 6.9pct. The S&P 500 had its biggest one-day fall since December 1 2008. The so-called ´´fear gauge´´ or Vix soared by 50pct to 48.00 - the highest close since March 9 2009.

US treasury prices rose sharply on Monday (yields lower) as investors moved away from growth-dependent assets like equities and commodities. US 2yr yields fell by 3pts to 0.26pct and US 10yr yields fell by 25pts to 2.32pct.

The Euro and commodity currencies fell against the greenback over the European and US sessions but the Japanese yen traded sideways. The Euro fell from highs near US$1.4400 to US$1.4130, before recovering to end the US session at US$1.4170. The Aussie dollar fell from highs near US104.00c to US101.75c, ending US trade near its lows. And the Japanese yen held between 77.50 yen per US dollar and JPY77.95, ending US trade near JPY77.60.

Benchmark crude oil slumped on Monday as investors feared that weaker global economic growth would mean reduced demand for oil. Nymex crude oil fell by US$5.57 or 6.4pct to US$81.31 a barrel and London Brent crude fell by US$5.63 to US$103.74 a barrel.

Base metal prices slumped up to 8pct on the London Metal Exchange on Monday on fears of slower global economic growth. While metals generally fell 5-8pct, aluminium lost only 0.8pct and copper fell just 2.8pct. But the gold price soared on Friday to record highs as investors scampered to buy safe-haven assets. Comex December gold rose by US$61.40 an ounce to US$1,713.20.

Ahead: In Australia, the NAB business survey is released together with housing finance figures. In the US, the Federal Reserve meets to decide interest rate settings. Data on productivity, labour costs and weekly retail sales are released. In China, retail sales, production and inflation data are released.