The global financial crisis unleashed panic Monday in the stock exchange in Sao Paulo, where trading had to be suspended twice, while markets in Buenos Aires and Mexico City also plunged, dpa reported.
In Sao Paulo, the largest stock exchange in Latin America, trading was suspended just 18 minutes after the starting bell, after the leading index Bovespa fell over 10 per cent.
When trading resumed, stocks continued to fall in relation to the previous day's closing, and trading had to be suspended again, this time for an hour.
The Brazilian real also took a free fall against the dollar, prompting the Brazilian Central Bank to sell 2.5 billion dollars in an effort to contain the local currency's depreciation.
Brazilian President Luiz Inacio Lula da Silva called Central Bank President Henrique Meirelles and Finance Minister Guido Mantega to an emergency meeting later Monday in Brasilia.
The circuit breaker is used automatically to calm down the markets in the Brazilian financial metropolis when there are changes of over 10 percentage points. Trading is then suspended for half an hour. Should the Bovespa fall by another 5 per cent after trading starts again, a new circuit breaker is prescribed, this time for an hour.
At 10:18 am (1318 GMT), the Bovespa had fallen by 10.5 per cent and trading was suspended.
Following the half-an-hour break, however, trading had to be suspended again at 11:44 am (1444 GMT), after the plunge reached 15.06 per cent compared to the previous day's close.
The Bovespa index, which was close to 74,000 points just a few months ago, was Monday on 37,814.44 points.
Trading resumed with a slight recovery, and at 2:40 pm (1740 GMT) stocks had fallen 11.15 per cent in relation to Friday closing, with the Bovespa on 39,554.09 points.
According to Brazilian economist Miguel Daud, the steep fall in markets around the world is evidence of the fear that the rescue plan passed last week by the US Congress is not enough to solve current financial turbulence, and underlined concern that Europe and other regions might be "contaminated" with financial sector problems.
"Brazil is vulnerable to that crisis, because it depends a lot on international liquidity," Daud noted.
The circuit breaker was introduced in Sao Paulo in the late 1990s, to handle successive foreign exchange crises from 1995 to 1999, when the government of President Fernando Henrique Cardoso introduced a huge devaluation of the real and adopted a system of floating exchange rates.
The circuit breaker was triggered a week ago, for the first time in a decade, after the US House of Representatives initially rejected the US government plan to rescue the financial sector.
In Mexico, at the start of trading, the IPC index was down by 9.88 per cent, although it later recovered somewhat and was losing just over 6 per cent half-way through the session.
In the Buenos Aires stock exchange, in turn, the Merval index fell by 11.27 per cent in barely one hour at the start of trading and after a slight recovery was losing 10.1 per cent at 2 pm (1700 GMT).
Argentine authorities evaluated whether to suspend trading completely but instead suspended trading only in certain shares, a measure which affected the titles of at least six companies Monday. The shares of Brazilian state-owned oil company Petrobras, in particular, were suspended with a drop of over 14 per cent.
Throughout the region, the stock exchange decline came hand in hand with a depreciation of local currencies against the dollar.
The dollar was worth 2.17 units of the Brazilian real Monday, with a rise of over 6 per cent in relation to Friday. The dollar also appreciated by close to 1 per cent against the Argentine peso, while the US currency gained 4.55 per cent against the Mexican peso.