Major indices around the world plunged yesterday (Monday), as the credit crisis picked up momentum in Europe and markets in Asia began bracing for a deep recessionary environment in the West.

The Dow Jones Industrial Average careened below 10,000 points for the first time since 2004 yesterday, after plummeting 500 points in the first hour of trading. The Dow closed down 369.88 points, or 3.6%, on the day at 9,955.50, after earlier surrendering as much as 800 points.

The Standard & Poor’s 500 Index shed 42.38 points, or 3.95%, to 1,056.85 and the Nasdaq Composite Index tumbled 137.52, or 7%, to close at 1,809.

The Dow has shed more than 1,100 points, or about 10% in slightly more than a week, and the S&P 500 has lost more than 15% in the same period.

Indices around the world suffered similar declines. London’s FTSE 100 index closed down 5.6% yesterday.  Germany’s DAX was down 5.2%, and the CAC-40 in Paris lost 5.9%. In Asia, the Nikkei 225 stock average in Tokyo fell 4.3%, the Hong Kong’s Hang Seng index slid 5%, and China’s CSI 300 Index slumped 5.1% coming off a one-week holiday.

The credit crisis that originated in the United States last year has clearly infiltrated economies in Europe and financial institutions throughout the region are beginning to topple.

France’s BNP Paribas SA (OTC: BNPQY) became the Eurozone’s largest bank by deposits after agreeing to buy Fortis NV’s Belgium and Luxembourg divisions, just days after it was partially nationalized by the government of the  Netherlands as part of a $16.4 billion resuce plan.

Trading of Fortis shares was suspended Monday after falling to $7.50 on Friday. The company’s shares have plunged roughly 70% this year.

Sunday, the German government was forced into a $68 billion (50 billion euro) rescue of Hypo Real Estate Holding AG – the nation’s second-biggest commercial property lender. 

HRE was torpedoed by short-term financing struggles within its Dublin-based subsidiary, Depfa Bank PLC.

Hypo Real Estate fell as much as 76% in Frankfurt trading.