Asian stock markets fell sharply following a severe rout in the U.S., with declines deepening from a day earlier. The Nikkei 225 is off 5.26% while the Hang Seng is down 4.31%. The Shanghai Composite is trading down by 2.1%.

The Dow Jones industrial average plunged by 1,175 points, its largest single-day points drop in history.

In the biggest global sell-off since 2016, financial markets from Asia to Europe to the United States were rocked primarily by concerns about inflation. The Dow was off a heart-stopping 1,600 points during afternoon trading, the largest intraday point decline in the blue-chip index’s history.

The Dow’s dive erased gains for the year so far and extended a multi-day slump that saw the Dow drop by some 600 point.

While market fear may not be based in any change in economic fundamentals, in its last meeting under chair Yellen, the Federal Reserve indicated it expects inflation pressures to increase through the year.

According to projections released in December, officials expect three rate hikes in 2018 – so long as market conditions remain broadly as they are – but some economists believe the central bank could add another increase at its final meeting of the year.

Meanwhile, Indian share markets have opened the day deep in the red. BSE Sensex is trading lower by 1075 points and NSE Nifty is trading lower by 301 points. S&P BSE Mid Cap is trading lower by 4.2% and S&P BSE Small Cap is trading down by 4.3%.

Losses are largely seen in consumer durables stocks, metal stocks and realty stocks. The rupee is trading at Rs 64.03 against the US$.

The Market cap to GDP ratio for Indian companies is close to dangerously high levels. While this is still some way off the peak of FY-08, when it had once reached close to 150, it’s relatively high.

FY17 saw this ratio reach close to 80. It is also expected to increase further given the moderate growth expectations in India’s GDP for FY18. Warren Buffett once considered this as one of the best valuation metrics to gauge the markets.