World sharemarkets have begun the fourth quarter with the biggest slide in a month as a weak economic data continued to dampen hopes of a recovery in the industrialised countries.

On Wall Street, the Dow Jones Industrial Average has plunged more than 200 points – the most in a month – drop on fears that a more than six-month rally in stocks may have overextended the current economic landscape.

Among the more discussed reports, the Institute for Supply Management said its monthly index of US manufacturing activity fell to 52.6 in September from 52.9 in August.

Stocks on Wall Street finished largely in the red, with the blue chip Dow Jones Industrial Average losing 34.01 points, or 0.4%, to end at 8438.39, a 1.2% drop for the week and despite data showing improved consumer sentiment and higher personal incomes.

The S&P 500 index lost 1.3 points, or 0.1%, to 918, a drop of 0.3% for the week and the second straight week of declines, the first since March.