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Stock markets across the globe are suffering their worst week since the global financial crisis of 2008.
Asian markets have reacted badly as the coronavirus outbreak spreads across Europe and unsettles investors.
On Wall Street, the Dow Jones index fell almost 1,200 points on Thursday – its biggest ever daily points-drop.
This rattled investors across Asia on Friday – with big drops on Japanese, Australian, Korean, Chinese and Indian markets.
In Japan, the Nikkei 225 index fell 3.7% on Friday – and is down more than 9% for this week.
Australia’s main shares index, the ASX200, fell by more than 3.3% on Friday, also suffering its biggest fall since the financial crisis of 2008.
The news of more coronavirus cases, notably in Italy, has raised concerns of a much larger economic impact than previously expected.
“Markets were too optimistic, and now may be too pessimistic,” said Iris Pang, Greater China economist at ING.
“Asian markets have been slow to react to Covid-19 because markets previously believed that this is a Greater China issue – until the infection cases in South Korea and Japan begun to rise steeply.”
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Indian stock markets also fell heavily on Friday with the Nifty 50 and Sensex indices both down by around 3%.
Asian stock markets reacted badly when the outbreak emerged in China but had stabilised – until now. China’s Shanghai Composite index fell 3.7% on Friday.
“While the coronavirus outbreak has been around for some weeks, the extent to which we can contain the spread and the economic impact was still largely uncertain,” said Bernard Aw, principal economist at IHS Markit.
“Manufacturing surveys showed a mixed impact from coronavirus-related disruptions, with Japan and Australia more affected than the US and Europe.”
Mayank Mishra, a strategist at Standard Chartered Bank, added: “Previously the market had taken some comfort in the falling infection rates in China as a result of containment measures put in place earlier.
“But the spread of the coronavirus infection outside China with clusters emerging in South Korea, Italy and Japan has increased concerns significantly.”
South Korea’s Kospi shares index fell 3.3% on Friday.