US non-farm payrolls data came in weaker than expected at 173,000, but, analyst are split whether there would be an interest rate hike by the US Fed at its Sept 16-17 meeting.
The consensus estimates was for a 223,000 figure, but despite that other data such as wage increase and a fall in unemployment raised the prospect of an interest rate hike.
European markets also dropped following the US nonfarm payrolls data. The German DAX and French CAC saw cuts of almost 2.5 per cent.
Analysts are not sure as to what could be the outcome of the US Fed meeting, but, the way markets have reacted suggest that investors could be looking at a US Fed interest rate hike for the first time in many years.
Asian markets have also reacted with the Indian markets falling to a 13 month low and facing the worst week for the markets in the last 4 years.
Foreign Portfolio Investors (FPIs) have been constantly selling in the Indian markets, while domestic institutions have been buyers.