The global markets faced a similar scenario in Q2 of 2011 due to a number of circumstances. The late and frantic US debt deal-which is still an issue, the Greek debt crisis, Spain and Portugal heading in a similar downward spiral. These issue damaged both the dollar and the Euro, the two most traded currencies in the world and caused great uncertainty which still looms today. And one thing markets don't like- uncertainty. Coupled with domestic issues such as inflation, disruption, governance etc it is easy to see why Q2 was so bad but I believe this is consistent with most economies in most years (Q2 sees a slowing down).