“You wonder where the whole thing is going. But every major fall on the markets that we have seen in recent years ends with a chaotic fall, before it starts getting better. Expect a big fall in Stockholm when the market opens today,” said Peter Malmqvist, chief analyst at online stockbroker Nordnet.

The Stockholm market opens at 9:30am local time.

The US markets were closed on Monday, but are also expected to fall heavily when they open later on Tuesday.

“According to the prognoses that I have said this morning, the US markets are expected to open down 4-5 percent. But there’s a long time left to 3pm and a lot can happen before then,” Malmqvist said.

“We have seen big falls in recent days, with a four percent fall in Stockholm yesterday. Now things have really started to happen in Asia, but I think that this means that we are entering the final phase in this downturn.

Shares in Tokyo fell nearly six percent on Tuesday, the largest fall since the terrorist attacks on the US on September 11th 2001. Shares in Hong Kong were down nearly eight percent, while markets in Seoul, Shanghai, Taipei and Bombay fell between four and seven percent.

The falls come amid increased concern that the US economy is heading for recession, something that could lead to a global downturn.

Share speculator and investor George Soros said in an interview with Australian paper the Standard on Tuesday that the world is facing its most serious financial crisis since the Second World War.

“We really have a serious financial crisis now,” he said.