Global markets nosedived overnight following the release of data that offered a mixed assessment of the global economy.

In the US, initial jobless claims fell to their lowest reading since May 2007, beating consensus expectations.

The New York manufacturing index rose at the fastest pace in over two years earlier this month, with the Philly Fed manufacturing gauge also topping estimates. Both measures signalled a strong rebound in factory output.

However the positive manufacturing update was countered by separate data showing a surprise decline in homebuilder confidence. Also, industrial production dropped in April, as utilities output tumbled during the month.

The data out of Europe wasn't much better, with first quarter eurozone GDP growth underwhelming expectations and igniting fears over the region's economy.

The global losses were significant and widespread, with the Dow suffering its worst single drop in five weeks.

It wasn't just equity markets in risk off mode, with most commodities taking a beating.

Oil snapped a four session winning streak, mirroring the slide in US stocks. Additional selling pressure came from an International Energy Agency report, which revealed only a modest increase in global demand forecasts.

Gold weakened on the back of data showing a bigger-than-expected climb in US consumer prices last month, strengthening the likelihood of the Fed tightening monetary policy next year.

In currency markets, the greenback fell against the yen as a drop in US Treasury yields undermined the dollar's attractiveness to foreign investors.

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