Stock markets have declined on fears over the state of the US and European economies.
In Europe, shares fell after a disappointing Spanish bond sale. German and French shares fell almost 3%.
The European Central Bank also said it would not roll back emergency measures to tackle the eurozone debt crisis, adding to investor concerns.
Wall Street fell 1% after the Federal Reserve signalled that it might not provide more stimulus.
In the UK, the FTSE 100 closed down 2.5%.
In Europe, the Spanish government had hoped to sell up to 3.5bn euros ($4.6bn; £2.9bn) of medium-term bonds, but it was only able to find buyers for 2.6bn euros.
It once again raised concerns about high levels of sovereign debt in several eurozone member states.
Achilleas Georgolopoulos of Lloyds Banking Group said the Spanish bond sale had been "very disappointing".
Market sentiment was further weakened by a survey showing continuing weakness in the eurozone services sector.
The price of oil and other benchmark commodities also dropped.
Light sweet crude fell 2.4% to $101.46 a barrel, while Brent crude fell by $2.17 to $122.69.
Gold fell 3.3% - to its lowest level since January - and copper dropped 2.8% - send UK-listed miners lower. BHP Billiton fell 3.4% and Rio Tinto dropped 3.8%.
Investor confidence was affected overnight by the US central bank, the Fed, which indicated on Tuesday that it was not considering a further round of quantitative easing (QE).
Under QE, a central bank injects new money into the financial system to help boost bank lending.
Some at the Federal Reserve "perceived a non-negligible risk that improvements in employment could diminish as the year progressed", said the minutes of the March meeting.
Meanwhile, ECB president Mario Draghi warned that the eurozone's economic outlook "remains subject to downside risks".
He made the comments after the ECB kept eurozone interest rates on hold at 1% for the fifth month in succession.
The Spanish government is continuing with extensive cost-cutting measures to reduce both its high budget deficit and overall level of sovereign debt.
It needs to sell bonds successfully on a rolling basis to meet its existing debt payments.
In addition to the disappointing take-up of the latest auction of Spanish government bonds, the yields on those already in circulation rose, which suggests that once again investors are getting more worried about Spain's ability to meet its debt payments.
The yield on 10-year Spanish bonds rose by 0.25 percentage points to 5.7%, the highest level since January.
Kathleen Brooks, a research director at financial website Forex, said: "In Europe the economic data is weak and sovereign concerns are flaring up once more."