At close, the OMXS index had fallen 3.3 percent to 343.1. The index has fallen by 8.4 percent so far this year.
The fall came despite earlier gains, with the market rising in early morning trading. The positive trend was broken by lunchtime, following falls on the US markets.
Other European markets also fell, with London’s FTSE 100 index down 2.7 percent, the Frankfurt DAX down 1.3 percent and the Paris CAC 40 down 1.7 percent.
All sectors were affected by the falls. The energy, manufacturing and luxury goods sectors performed worst.
Clothes giant Hennes & Mauritz was among the worst performers, falling 4.9 percent to 388 kronor. Volvo was down 7 percent to 99.75 kronor, with Scania down 7.3 percent to 133.25 kronor.
Shares in engineering company ABB were down 6.3 percent to 164 kronor, Electrolux was down 5.1 percent and Skanska fell 5.8 percent.
Other companies to lose out in Stockholm were Meda, Lundin Petroleum and Hexagon. Björn Borg and Securitas Systems also fell.
There were some winners, including network technology company Switchcore, which earlier announced it was selling its operations to US company eSilicon. The company’s shares rose 11.1 percent following the news.