Global stocks were heading Friday for their largest weekly drop since the financial crisis more than a decade ago over fears the coronavirus could wreak havoc on the world economy.
Crude oil prices slipped lower as well and analysts said that central banks, especially the US Federal Reserve, might have to shift into crisis-resolution mode once again with urgent interest rate cuts.
James Bullard, head of the St. Louis Fed, warned Friday that emergency rate cuts were "not the baseline at this time" for the central bank's policymakers.
"Beyond helping to alleviate the current stock market collapse, there is little any central bank could do to alleviate the potential repercussions of a global pandemic," noted Joshua Mahony, senior market analyst at IG.
Frankfurt headed the losses in Europe, shedding more than five percent at one point in morning deals.
Leading European stock markets have tumbled around 12 percent in just one week, while London's FTSE 100 is back at levels seen in late 2018.
In New York, the Dow Jones index was 3.0 percent lower in initial trades, while the broader S&P 500 was off by 3.1 percent.
On Thursday, the Dow suffered its biggest points loss on record, shedding almost 1,200 points as its 4.4-percent drop marked the steepest decline in two years.
"Stock markets are well on their way to their worst week since the global financial crisis," said Craig Erlam, senior market analyst at Oanda trading group.
Stock markets in Shanghai, Sydney and Tokyo all closed down 3.0 percent, while Jakarta shed more than four percent.
The VIX "fear" index -- which measures market volatility -- is now at its highest level since the European debt crisis erupted in 2011.
"The panic mode is full on," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"The coronavirus outbreak has certainly hit businesses, and it might have a longer-than-expected negative impact on company earnings and global growth," she added.
Elsewhere Friday, the Japanese yen continue to benefit from its status as a haven investment in times of economic unrest, making solid gains against the dollar.
Concern that global crude demand will crash meanwhile sent oil prices down again, by almost 3.0 percent for Brent crude in London and by more than 4.0 percent for WTI crude.
"Another day, another sell-off," remarked analyst Stephen Brennock at energy consultancy PVM Associates.
"Risk assets took a significant step lower... as market players continued to squirm with unease over the growing coronavirus crisis."
Investors kept an eye out for interventions by central banks, particularly the US Federal Reserve, in the hope they would unveil monetary easing measures, and governments also faced pressure to provide support.
French Economy and Finance Minister Bruno Le Maire said the virus would be considered "a case of force majeure for companies," meaning they would not be penalised if they failed to meet deadlines on public contracts.
The virus has now proliferated around the globe, emerging in every continent except Antarctica, and prompting many governments and businesses to try to stop people travelling or gathering in crowded places.
The Geneva International Motor Show was the latest major event to be cancelled after Switzerland banned large gatherings.
The virus has killed more than 2,800 people and infected more than 83,000 worldwide since late December.
On Friday, Nigeria reported the first new coronavirus case in sub-Saharan Africa, as the World Health Organization warned against the "fatal mistake" of complacency.
- Key figures around 1430 GMT -
London - FTSE 100: DOWN 3.8 percent at 6,540.46 points
Frankfurt - DAX 30: DOWN 4.0 percent at 11,873.26
Paris - CAC 40: DOWN 3.7 percent at 5,295.11
Milan - FTSE MIB: DOWN 3.8 percent at 221,923.95
EURO STOXX 50: DOWN 3.8 percent at 3,323.66
New York - Dow: DOWN 3.0 percent at 24,986.27
Tokyo - Nikkei 225: DOWN 3.7 percent at 21,142.96 (close)
Hong Kong - Hang Seng: DOWN 2.4 percent at 26,129.93 (close)
Shanghai - Composite: DOWN 3.7 percent at 2,880.30 (close)
Dollar/yen: DOWN at 108.61 from 109.59 at 2200 GMT
Euro/dollar: DOWN at $1.0968 from $1.1001
Pound/dollar: DOWN at $1.2841 from $1.2887
Euro/pound: UP at 85.43 pence from 85.36 pence
Brent Crude: DOWN 2.9 percent at $50.68 per barrel
West Texas Intermediate: DOWN 4.2 percent at $45.12