Global stocks and U.S. bond yields dived on Thursday, while the dollar, gold and oil prices rocketed higher after Russian President Vladimir Putin authorized troops to carry out a "special military operation" in the Donbas region in eastern Ukraine.

European stock markets tumbled at the start of trade on Thursday, with London stocks sank almost 3 percent, and Frankfurt and Paris each slumped by more than 4 percent before paring losses.

Around 1000 GMT, London was down 2.74 percent, Frankfurt slumped by 3.57 percent and Paris slid by 3.61 percent.

The equities rout in Asia and Europe looked set to continue in the United States, with a sharp jump in commodity prices adding to worries about inflation and risks to economic growth.

S&P 500 e-minis were down 2.3 percent, and Nasdaq futures fell 2.8 percent, putting the U.S. index on track toward confirming it is in a bear market.

"After [S&P 500] breaking the late January 4,212 low during the Asian session today for fresh year to date lows, the risks are for the sell-off to extend another 5 percent lower towards wave equality at 4000 to complete a three wave corrective sequence from the 4808 high," Tony Sycamore, market analyst with GAIN Capital, wrote in a note.

Closing down at least 20 percent from its November 19 record high close of 16,057.437 points would confirm the Nasdaq has been in a bear market, according to a widely used definition. That would mark its first bear market since 2020 when the coronavirus outbreak crushed global financial markets.

The Moscow Exchange announced a suspension of all trading on Thursday. 

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 3.2 percent to its lowest level since November 2020. Australian shares shed more than 3 percent, and Chinese blue chips lost 2 percent.

Tokyo's Nikkei was 2.1 percent lower.

Asset markets have seen a sharp increase in volatility over the deepening crisis, with the Cboe Volatility Index, known as Wall Street's fear gauge, up more than 55 percent over the past nine days. 

Oil may continue to surge

Brent crude futures, which seesawed between sharp rises and falls on Wednesday, jumped more than 3.5 percent to shoot past $100 a barrel on Thursday for the first time since September 2014.

West Texas Intermediate leaped 4.6 percent to $96.22 per barrel, their highest since August 2014.

Buyers will look for a move over $101.91 for fresh seven year highs opening the door to potential move towards $102 and on to $105, Fiona Cincotta, market analyst with GAIN Capital, wrote in a note.

Gold could rally 

Spot gold jumped more than 1.7 percent to hit its highest level since early January 2021.

As gold has surged to around $1,940 per ounce, Sycamore read it as a catalyst for movement toward the next upside target in the range of $1,950 to $1,965. 

"Beyond here, there is scope for the rally to retest the August 2020, $2,075 high," he said. 

Sell-off spreads from equities to cryptocurrencies

The deepening sell-off in equities came after U.S. stocks already took a beating on Wednesday, with the Dow Jones Industrial Average down 1.38 percent to barely above the level that would have confirmed a correction. The S&P 500, which confirmed a correction a day earlier, lost 1.84 percent to 4,225.5.

Investors have also been grappling with the prospect of imminent policy tightening by the U.S. Federal Reserve aimed at combating surging inflation, which NAB analysts say could be exacerbated by a commodities supply shock.

While expectations of an aggressive 50-basis-point hike at the Fed's March meeting have eased, Fed funds futures continue to point to at least six rate hikes this year. 

All the same, immediate geopolitical threats weighed on U.S. yields on Thursday, pushing the benchmark U.S. 10-year yield down sharply to 1.8681 percent from its U.S. close of 1.977 percent on Wednesday. The two-year yield also fell to 1.5 percent from a close of 1.6 percent.

The global flight to safety boosted the dollar, which jumped more than half a percent a basket of other major trading partners to 96.715.

The euro was down 0.8 percent on the day at $1.1220.

Russian ruble hits a record low. The rouble tumbled against the U.S. dollar, which has seen the currency pair fall over 10 percent on Thursday alone, according to Cincotta. It was Russian ruble's most volatile day since December 2014, she said.

The sell-off also spread to cryptocurrency markets, pushing bitcoin below $35,000 for the first time in a month.

"Markets are now more adequately pricing in the risk of something horrific happening. That, combined with the uncertainty, is a horrible environment to be in. No one wants risk exposure when that's floating around," said Rob Carnell, head of Asia Pacific research at ING.

(With input from Reuters)