Stock markets in the United States and Europe tumbled on Thursday.
Markets in Europe dropped across the board, while Wall Street recovered most of its nerve at the opening of trading, with the Dow, Nasdaq and S&P 500 losing around half-a-percent.
The tension stemmed from the fall of Portugal's largest bank, the Banco Espirito Santo.
The institution allegedly missed a debt payment this week and was held responsible for accounting irregularities.
With the unstable pace of economic recovery in Europe, analysts say the shock in global stock markets shows that investors are worried about the overall financial health of the region.
It's also raising fears that Portugal might face a crisis again, just about a month after emerging from a bailout.
Portugal's regulator halted trading at the troubled bank after its share price dumped 17 percent.
The Portuguese government insists its biggest bank is solid and that the only trouble is at its parent company.
Investors, however, remain skeptical.
They say they've heard such reassurances before and that the scale of the problem remains unclear.
Stock markets in Asia also slid on the news out of Portugal.
The Nikkei dropped more than 30 percent to around 15-thousand 2-hundred.
"Right now, it looks more like a regional crisis than an international one, like in the case of Greece in 2011. The Portuguese government has some room to respond to resolve the situation. Still, it's likely to affect the Korean stock markets until early next week."
The nation's benchmark KOSPI fell more than 14 points to close out the week at 1-thousand 9-hundred-88.
Kim Ji-yeon, Arirang News.