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WATCH ABOVE: Within minutes of opening, the Dow Jones plunged more than 1,000 points before slowly recovering, but still ending the day with a huge loss. Jackson Proskow and Mike Drolet report.

North American stock markets ended a dramatic trading day sharply lower, clawing back only some ground lost during a turbulent plunge at the opening bell.

North American markets were reacting to deep sell-offs on Asian and European markets. China’s main index sank 8.5 per cent — its biggest drop since the early days of the 2008 global financial crisis — amid deepening fears over the health of the world’s second-largest economy.

In response, the benchmark index for shares on the Toronto Stock Exchange fell 767 points, or 5.7 per cent in the opening minutes of trade. The Dow Jones industrial average cratered a worrisome 1,058 points or 6.43 per cent.

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North American stock prices generally regained much of the early losses by the early afternoon before declining again ahead of the closing bell.

The composite index in Toronto ended the day down 420 points, or 3.12 per cent. In New York, the Dow Jones industrial average was 588 points lower, or 3.58 per cent. S&P 500 shares declined 3.94 per cent as a group, or 77.7 points.

Commodities hit

Oil and other commodities as well as the currencies of many countries — including Canada — also dove in value on concerns that a sharp slowdown in China might hurt economic growth around the globe.

Financial markets withstood a serious hit Monday. The Dow Jones fell more than 1000 points just after the opening bell, ended the day down close to 600 points. CBS’s Marlie Hall reports.

The Canadian dollar was down nearly half a U.S. cent at about 75.5 cents US early Monday and the price of oil was below US$39 a barrel, continuing a sharp decline that began two months ago.

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Since closing at $61.01 on June 23, contracts for a North American benchmark crude have been losing ground due to an oversupply and concerns about economic demand. Crude closed Friday at US$40.45.

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North American stock markets were expected to suffer heavy losses when they being trading at 9:30 a.m. Eastern Time.

The Dow futures were down 664.0 points at 15,802.0 about an hour before the markets opened, the Nasdaq futures were down 208.5 points at 3,993.3 and the S&P 500 futures were down 70.2 points at 1,901.2.

Europe rout

In Europe, the FTSE index in London was down 251.56 points at 5,936.09, German’s DAX index was down 443.51 points at 9,681.01 and the Paris CAC 40 was down 214 at 4,416.99.

Earlier, China’s Shanghai index suffered its biggest percentage decline since February 2007, with many China-listed companies hitting their 10 per cent downside limits. The benchmark closed at 3,209.91 points, meaning it has lost all of its gains for 2015, though it is still more than 40 per cent above its level a year ago.

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Japan’s Nikkei fell 4.6 per cent to 18,540.68, its worst one-day drop since in over two and a half years.

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China’s dimming outlook is drawing calls for more economic stimulus from Beijing, though earlier government efforts to staunch the hemorrhage appear to have done little to stabilize markets.

Some analysts say they see opportunities for bargains in the latest plunge in prices. But underlying the gloom is the growing conviction that policymakers and regulators may lack the means to staunch the losses.

MORE: 5 reasons why the market meltdown matters to all Canadians

The bloodletting spread across Asia, as Hong Kong’s Hang Seng index fell 5.2 per cent to 21,251.57. Australia’s S&P ASX/200 slid 4.1 per cent to 5,001.30, while South Korea’s Kospi lost 2.5 per cent to 1,829.81.

Fresh evidence of the slowdown in China’s economy sparked a wave of selling Friday in Europe, the U.S. and Canada. The Toronto Stock Exchange’s S&P/TSX composite index dropped 263.33 points to close at 13,473.67, a nearly 13 per cent decrease from its highs well above 15,000 in April.

“My biggest concern is that global growth momentum is very fragile. The most important step is to see China take further action to try to bring their economy to a 7 per cent growth path,” said Rajiv Biswas, Asia-Pacific chief economist for IHS.