South African markets joined their international counterparts on a southerly migration on Monday amid fresh concerns over the European debt crisis
The JSE closed 2.81% or 585 points lower, but at one stage was down by as much as 2.81% or 857 points.
The rand also came under pressure - weakening by as much as 1.8% or 13 cents against the greenback while the JSE was still trading - and looking to weaken more overnight - while bonds were up to 26 basis points weaker.
The rand's spiral against the dollar continued despite the euro - which the local currency tends to frequently track - staging a mild recovery against the greenback.
"If you look at what has happened in perspective, you'll see that the euro/dollar move has been a bit overdone," a market analyst said.
"In two sessions we saw the euro/dollar drop from 1.41 to 136.50 at the end of last week and what's happened now appears to be a technical bounce."
He added that despite the mild recovery, it was too early to turn bullish on the euro.
"And it's difficult to be optimistic about the rand today as Wall Street futures are presently trading lower."
Traders attributed the bonds' weakness mainly to the rand and concerns over the euro, saying global markets were on edge over fears that the eurozone sovereign debt crisis was spiralling out of control.
A local trader noted that there had been buying into weakness, but there were generally more sellers around.
"We're weaker on the currency and there's a bit of uncertainty on the euro. Guys are generally risk averse.
"The guys stop it after a five point loss and then it comes back again and has another go, so the pressure point definitely seems to be on the topside. 60 was a big level for us, we are pretty much through there at the moment, we'll probably push up to 70 on the R157s before we see a couple of bids coming in for the auction tomorrow (Tuesday)," a trader said.
Meanwhile, US stocks opened lower on Monday, with blue chips close to their 2011 lows, driven by fears that Europe's debt crisis will soon come to a head. This following a dismal week that culminated in Wall Street suffering its fifth triple-digit loss in six sessions.
European markets also took a knock on Monday after the German economy minister said an orderly default for Greece could no longer be ruled out. According to Dow Jones Newswires, the lack of action by the Group of Seven leading industrial nations over the weekend also fed investor anxiety.
European Central Bank President Jean-Claude Trichet on Monday called on Greece with "great firmness" to implement its fiscal reforms, as he said that central bankers stand ready to inject liquidity into financial markets if needed.
The continent's bank shares took the biggest beating. French lenders were hit hardest on expectations that Moody's Investors Service could downgrade them this week due to their holdings of Greek government debt.
"The euro was conceived to bring a lot of unity to the European markets," said Randy Bateman, chief investment officer of Huntington Funds. "[But] they never really built in a fail-safe mechanism. The economies that constitute the European community are just too diverse."
Asia markets also fell sharply, with Japan's Nikkei Stock Average sliding 2.3% to close at a 2 1/2-year low.
Gold futures fell to $1,839.60 an ounce. Crude-oil futures declined to $86.79 a barrel. The U.S. dollar fell versus the euro and the yen.
The economic calendar was bare Monday, but investors will be looking ahead to wholesale inflation and retail sales data on Wednesday, retail inflation and jobless claims on Thursday and consumer sentiment on Friday.