REUTERS
Shares around the world have plunged as investors fear the spread of the coronavirus will destroy economic growth with government action insufficient to arrest the decline.
The main UK index dropped more than 10% in its worst day since 1987.
In the US, the Dow and S&P 500 were also hit by their steepest daily falls since 1987.
The declines came despite actions by the Federal Reserve and European Central Bank to ease financial strains.
At the start of US trading, plummeting shares triggered an unusual automatic suspension in trading for the second time this week.
When trade resumed 15 minutes later, shares continued to fall, taking cues from the slide in European markets.
The S&P 500 fell 9.5% and the Nasdaq ended 9.4% lower, while losses on the UK's FTSE 100 wiped some £160.4bn off the market. In France and Germany, indexes cratered more than 12%.
"Markets are at a breaking point," said Neil Wilson, chief market analyst at Markets.com. "No one knows what a total economic shutdown, however temporary, looks like."
The declines came after the US restricted travel from mainland Europe.
Losses on European indexes accelerated after the eurozone's central bank failed to cut interest rates, although it did pledge fresh stimulus measures.
The New York branch of the Federal Reserve said it was pumping $1.5tr to ease strains in the debt markets, offering increased overnight loans to banks and expanding the kinds of assets it will buy to keep firms lending.
The announcement, which came after European markets had closed, briefly sent shares higher, but they dropped back by the end of the day.
Rate cuts by the US central bank last week and the Bank of England on Wednesday also did little to soothe investors.
"What we really need is some huge confidence that this isn't going to cause the kind of stress and horrible loss of life [it has] in Italy everywhere else in the world," said former Goldman Sachs chief economist Lord Jim O'Neill.
Stocks in Asia also saw big falls earlier, with Japan's benchmark Nikkei 225 index closing 4.4% lower.
Panicked selling led to trading halts in Brazil, while not a single company in the FTSE 100 index gained on Thursday.
Travel companies saw some of the biggest falls, driven by US President Donald Trump's 30-day ban on travellers from mainland Europe.
Shares in Delta Air Lines and United Airlines - among the most affected by the ban - dropped more than 20%. In the UK, airline group IAG was down more than 15% and Tui fell 17%.
Other companies warning on the impact of Covid-19 on Thursday included:
- BT Group announced that chief executive Philip Jansen had tested positive for coronavirus. It said he had "relatively mild" symptoms and would work remotely
- Broadcom said uncertainty about demand was prompting it to withdraw its 2020 growth forecast
- Norwegian said it would ground 40% of its long-haul fleet and cancel up to 25% of its short-haul flights until the end of May
- WH Smith issued a profit warning after the outbreak hit sales in its travel division, which includes store at airports and train stations
- Cineworld shares fell by more than 20%. It said that in a worst-case scenario, there was a risk it might not be able to repay its debts
- Estate agent Savills said the outbreak had caused a big drop in transactions in China and across Asia
- Princess Cruises, a line owned by Carnival, said it would suspend operations for 60 days. Viking announced a similar move
- Disney closed its California parks until the end of March
Oil prices also fell, with Brent crude down more than 8% at about $33 a barrel.
On the floor of the New York Stock Exchange, tensions were high. Some traders were speculating the tumbles could trigger a second trading suspension - something that has never happened, not even during the financial crisis.
Since the start of the market turmoil, indexes in the US and elsewhere have fallen more than 20% from their recent highs - a threshold that is a red flag for a recession.
"It looks increasingly likely that the coming contraction will be deeper and more protracted than we were anticipating just a few days ago," said Jay Bryson, acting chief economist at Wells Fargo. "The airline and hotel industries are in free fall, and there will be multiplier effects."
Investors in the US are now watching the US government response.
AFP VIA GETTY IMAGES
In a presidential address on Wednesday, Mr Trump said he would extend deadlines for tax payments for those affected, increase low-cost loans to small businesses and provide financial relief for US workers who are ill, quarantined or caring for others due to the illness.
But Republicans and Democrats in Congress appear at odds over additional steps while Mr Trump's favoured approach - a tax cut for workers - has failed to garner widespread support.
"The stock market at least is saying it's not been enough yet," said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Why should I care if stock markets fall?
Many people's initial reaction to "the markets" is that they are not directly affected, because they do not invest money.
Yet there are millions of people with a pension - either private or through work - who will see their savings (in what is known as a defined contribution pension) invested by pension schemes. The value of their savings pot is influenced by the performance of these investments.
So big rises or falls can affect your pension, but the advice is to remember that pension savings, like any investments, are usually a long-term bet.
The Western world's three largest central banks have now pitted their collective firepower against the economic chill caused by the coronavirus - to little effect.
Stock markets continue to slide. The FTSE 100 has had its worst day since Black Monday in October 1987.
Observers again might wonder what new information is spooking investors, given that central banks have in the last 10 days done their best to halt the slide. In truth, there is little new - most traders already knew that the virus is likely to cause significant economic disruption likely to push most Western economies into recession.
What may have spooked them again is President Donald Trump's decision to stop most travel between continental Europe and the United States - a big enough factor in itself, but more importantly, the manner in which it was done. There was no consultation, and Mr Trump looked uncharacteristically uncertain, as if he, too, had finally been panicked by the virus.
There is also a small, but telling detail - Mr Trump first said the ban would apply to cargo flights, but then corrected himself to say it would not. A big proportion of cargo, however, is carried in the belly holds of passenger aircraft. If there are no passenger flights, there will be much less cargo, an enormous disruption to exporters and manufacturers on both sides of the Atlantic.
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