Global markets slide again on enduring concern over virus

Stocks are opening sharply lower on Wall Street, erasing 2 per cent from major indexes, a day after surging 4 per cent as the mood swings back to fear.

European markets quickly lost early gains Thursday and are down more than 2 per cent. The virus-fuelled volatility in financial markets is into its its third week as new cases and deaths rose globally.

That is putting more pressure on companies, with businesses lowering their earnings targets or cancelling forecasts altogether as it remains unclear how long the outbreak will remain disruptive. Treasury yields dropped again as investors flocked to safe investments. The price of gold also rose.

Stock markets turned lower on Thursday, despite earlier gains in Asia, extending days of wild swings as investors try to gauge the economic damage of the virus outbreak and how much governments and central banks can help.

European markets quickly lost their early gains, with France's CAC 40 down 2 per cent at 5,357. Germany's DAX shed 1.9 per cent to 11,897. Britain's FTSE 100 was down 1.8 per cent to 6,697. Wall Street was expected to fall sharply on the open, with Dow futures down 1.7 per cent and those for the S&P 500 retreating 2 per cent.

The virus-fuelled volatility in world financial markets has extended into a third week as new cases and deaths rose globally. That is putting more pressure on companies, with numerous airlines cancelling flights and some even laying off workers.

Businesses are lowering their earnings targets or cancelling forecasts altogether as it remains unclear how long the outbreak will continue to disrupt supply chains, production and travel. In Britain, a financially troubled regional airline, Flybe, collapsed as it struggled with the drop in demand for flights due to the virus.

"Initial gains for equity markets have faded as investors once again begin to worry about the spread of the coronavirus outside China," said Chris Beauchamp, chief market analyst at IG.

"The Western world is now following some of China's playbook, closing schools and declaring a state of emergency for example, but there is a sense that this is too little, too late."