The S&P 500 also suffered, plummeting 101 points to finish at 2,581.
The benchmark FTSE 100 share index fell 39.59 points, or 0.6%, to 7,131.10.
In the United States, the Dow Jones ended Thursday's trading session 4.2% lower at 23,860, and the wider S&P 500 index closed down 3.8%. The broader S&P 500 index closed up 38 points, or 1.5 percent, at 2,620 and the Nasdaq finished up 97 points, or 1.4 percent, at 6,874. The Dow, which booked a record-breaking loss of 1,175 points Monday, has shed roughly 2,700 points since Friday amid a brisk retreat from all-time highs.
The markets could continue to trend higher if U.S. Treasury yields remain in a holding pattern.
Earlier, the Shanghai Composite Index had tumbled as much as 6.0 percent to its lowest since May 2017, and the blue chip CSI300 index dived 6.1 percent.
Asian markets saw hefty falls overnight, while in the USA on Thursday the Dow Jones fell by more than 1,000 points for the second time this week.
"Global markets are breathing a huge sigh of relief after a late rally in USA stocks yesterday", currency analysts at ING wrote in a report on Wednesday.
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Stocks began to fall in early trading and their losses grew throughout the day.
The Canadian market was in negative territory, but off its lows for the day, as oil prices fell and Statistics Canada released disappointing jobs data. Brent crude, the global standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London. Brent crude, used to price global oils, lost 51 cents to $64.33 in London. Because it results in higher borrowing costs, slows growth, makes bonds a more attractive investment alternative compared to stocks and makes today's corporate earnings less valuable in the future. The reduction in points was the largest since the 2008 financial crisis, but, percentage-wise, was not as significant.
World stocks were also on track for their worst week since 2011, weighed down by a 4 percent drop in Chinese stocks.
In Europe, equity markets were once again a sea of red, with the German index, the Dax, closing down nearly 1.7 per cent in Frankfurt, the French Cac 40 finishing 1.85 per cent lower and London's blue-chip FTSE 100 index 1.3 per cent lower.
Controversial YouTube star punished over recent behavior
More to the point, however, is that YouTube is acknowledging Paul's antics might have negative effects well outside his channel. Early Friday morning, YouTube announced on Twitter it would "temporarily" cut Logan Paul off from video ad revenue .
Dow Jones Plummets Again On Worries About Inflation
Stocks swung dramatically between gains and losses Friday, an appropriate end to a week that featured numerous big point swings. The selling on Wall Street spread to Asia overnight as stocks dropped in China and Japan .
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The S&P 500 posted 1 new 52-week highs and 38 new lows; the Nasdaq Composite recorded 17 new highs and 164 new lows. The yield on the benchmark 10-year Treasury bond was up Thursday to 2.83 percent, near a four-year high.
Trump signs budget deal, government reopens
Rand Paul , a conservative Kentucky Republican and one-time presidential contender, to trigger a partial government shutdown. Paul said all he wanted was a vote on an amendment to restore the budget caps, set in 2011 to rein in deficit spending.
Private Space Flight Blasts Off With Falcon Heavy
A mannequin dressed in a " real deal" SpaceX spacesuit _ dubbed "Starman" by Musk _ is strapped in behind the car's wheel. The move by Musk is similar to how brands played off the popularity of the US space program in the 1960s, notes Adamson.