World shares slump after Trump announcement on virus plans

Shares fell in Europe and Asia on Thursday after President Donald Trump announced that the US was stepping up its efforts to combat the virus outbreak that began in China, as the number of cases surpassed 81,000.

Germany's DAX lost 2.2 per cent to 12,498.88 and the CAC 40 in Paris dropped 2.3 per cent to 5,59.99. In London, the FTSE 100 lost 2.5 per cent to 6,869.80. The future for the Dow Jones Industrial Average fell 0.5 per cent to 26,779.00 and the future contract for the S&P 500 was 0.6 per cent lower, at 3,092.20.

Trump told reporters late Wednesday that he was open to spending "whatever is appropriate" to fight the virus, after the Senate Democratic Leader Chuck Schumer of New York suggested USD 8.5 billion instead of the requested USD 2.5 billion. He put Vice President Mike Pence in charge of the response to the virus outbreak.

Trump said he didn't believe a pandemic was inevitable, though health officials standing beside him warned more infections are coming. And shortly after Trump spoke, the government announced that another person in the US was infected someone in California who appears not to have the usual risk factors of having travelled abroad or being exposed to another patient.

Traders are concerned the global economy could stumble as major industrial countries struggles to contain the outbreak. News of hundreds of new infections in China and elsewhere helped pull share prices lower Thursday in Asia.

"Previous crisis playbooks have all revolved around buying the dip in equities, so I wonder just how much further the fire sale will go before the market at least starts to scale in again," Stephen Innes of AxiCorp said in a report.

"But based on last night's price action, it does appear that any bounce in stocks is likely to be short-lived. And eventually, the markets could fall deeper as investors start to think what's the point of trying to pick the bottom in the short term."