More than €2.1 trillion was wiped off global stocks this week as China’s slowing economy and currency depreciations spooked investors around the world, leading to the worst start to a year for markets in at least two decades.

A robust United States jobs report, which added a stronger-than-expected 292,000 extra jobs in December, allayed some concerns over the US's economic growth yesterday but failed to rescue the grim week for financial markets.

The catalyst for this week’s market turmoil has been China’s plunging stock market and weakening currency. Beijing’s powerful influence over financial markets this week underlines for investors how the country’s policy decisions reverberate across the global stage.

"We can see how even relatively small falls in the Chinese [renminbi] are having a major impact on global markets," said Mark Haefele, global chief investment officer at UBS Wealth Management.

The S&P 500 sagged to take its loss for the week to 4.8 per cent. Almost every major European market also fell again yesterday. Chinese stocks stabilised after authorities scrapped a circuit-breaker and lifted the daily currency fix for the first time in nine days.

In Dublin, the ISEQ index ended broadly unchanged yesterday, but it has lost more than 3.3 per cent in the first week of the year, a drop of more than €2.9 billion in value, as investors in Irish stocks reacted to international trends.

The FTSE All-World Index lost 5.7 per cent this week, making it the worst five-day start to a new year since at least 1994, when the index was established.