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Pedestrians wear protective masks while walking along a street in New York, U.S., on Thursday, Feb. 27, 2020. Image Credit: Bloomberg

New York: European and US stock markets slumped painfully again Thursday as new coronavirus infections spread outside China, exacerbating fears of a global slowdown.

While the markets in Shanghai and Hong Kong closed higher, Europe and New York saw a sea of red.

London, Frankfurt and Paris all posted losses of more than three per cent on the day.

Wall Street also took a beating, with major indices shedding more than four per cent in what is shaping up to be the US market’s worst week since the 2008 financial crisis.

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The Dow shed nearly 1,200 points, or 4.4 per cent, taking its losses for the week to more than 11 per cent.

Oil prices plunged by more than four per cent at one point before recovering somewhat, while the yen gained as traders turned to a traditional haven in times of economic turbulence.

“There was more coronavirus carnage on the markets,” Spreadex analyst Connor Campbell told AFP.

This is “one of the worst weeks in recent memory and terrifyingly, it’s not over yet,” he said. “Friday is a tricky proposition.”

Bracing for impact

Around 2,813 people have died worldwide and more than 82,500 have been infected in dozens of countries, raising fears of a pandemic.

US authorities in California said they are monitoring some 8,400 people for the new coronavirus, after officials confirmed a woman had contracted the disease without traveling to any of the outbreak-hit regions.

Investors are bracing for the economic impact, with companies including Apple, Microsoft and drinks giant Diageo saying they expect sales to suffer.

Goldman Sachs was the latest on Thursday, slashing its 2020 forecast for US earnings, saying it now expects flat earnings in 2020 and lower growth in 2021.

“It seems that investors concluded that a global pandemic is inevitable, as the outbreaks in South Korea and Europe are getting worse by the day,” said Gorilla Trades strategist Ken Berman.

President Emmanuel Macron said France was preparing for a surge in the number of cases, adding: “We are facing a crisis, an epidemic.”

And Denmark and Estonia reported their first cases.

In the United States, President Donald Trump on Wednesday sought to ease concerns, telling reporters he did not think it “inevitable” that COVID-19 would continue to spread throughout the country, contradicting health officials.

In Japan, Prime Minister Shinzo Abe on Thursday told schools to close nationwide for several weeks, and Saudi Arabia banned pilgrims from visiting Islam’s holiest sites to try to contain the virus.

Shanghai’s stock market nonetheless closed slightly higher as the virus appeared to be easing a bit in China as it strengthened in countries such as Iran, Italy and South Korea.

The panic-selling has seen investors rush into haven investments, with the yield on 10-year and 30-year US Treasuries around record lows, while gold prices climbed.