A tumultuous fall in Chinese equities dubbed “Black Monday” by Xinhua, the official state news agency, triggered a ferocious sell-off in international markets yesterday as fear spread of the potential impact of slowing growth in China on the global economy.

The market turmoil appeared to reduce the chances of the US Federal Reserve lifting interest rates next month and could even spur it to keep them on hold until 2016. Lawrence Summers, former US Treasury secretary, wrote in the Financial Times yesterday that raising rates in the near future would be a “serious error” that would threaten stability.

The Shanghai reverse ripped through Asian and European bourses and sent Wall Street sharply lower at first, with the S&P 500 falling as much as 5.3 per cent. Some investors jumped back into the market, however, paring the US benchmark’s loss to under 1.2 per cent by early afternoon in New York.