Global financial markets are set for another turbulent week as more countries take action to slow the spread of the coronavirus.
London’s FTSE 100 index sank 4.4% in early trade. Asian stock markets had fallen sharply earlier on Monday.
Crude oil prices have also slumped as economies around the world come to a virtual standstill.
There are concerns that policymakers are struggling to ease the impact of an impending global recession.
In Asia, the Hang Seng index in Hong Kong fell by nearly 5%, while China’s Shanghai Composite lost 2.4%.
New Zealand’s main share index started the day down by more than 10%, but recovered some ground to close 7.6% lower.
The ASX 200 in Sydney dropped more than 7% in early trading and closed down 5.6% at the end of the trading session .
In India, where a 14-hour curfew was announced, its Sensex index fell 10%, triggering a “circuit breaker” and a 45-minute trading halt. It continued its slide to fall 12%.
“It would be a brave, or foolish, man to call the bottom in equities without a dramatic medical breakthrough,” said Alan Ruskin from Deutsche Bank.
Brent crude oil futures fell by 4.5% as the closure of businesses and mass travel bans around the world hit demand for energy.
It comes as fears are growing over what authorities around the world can do to combat the effect of the sharp slowdown in global economic activity.
In the US, senators have failed to pass a motion to advance stimulus legislation worth almost $2 trillion to help the world’s biggest economy deal with the impact of the pandemic, after congressional Democrats said it would be too generous to big business.
At the same time countries around the world have announced new measures to slow the spread of the virus, including ordering people to stay at home and closing down bars and restaurants.
UK Prime Minister Boris Johnson has warned “tougher measures” could be introduced if people do not take the government’s coronavirus advice seriously.
Germany has expanded curbs on social interactions to try to contain the outbreak, banning public gatherings of more than two people .
Australia is shutting down non-essential services as coronavirus cases rise rapidly in the country.
US stocks have already fallen by around a third since the middle of last month, while even areas of investment normally seen as safe havens, such as the bond market, are under stress as hard-hit funds are forced to sell good assets to cover losses elsewhere.