Coronavirus hits Wall Street

Global stocks had their worst day in two years as new coronavirus cases outside China dashed hopes that the outbreak had been contained and raised fears of slowing global growth.

Following steep declines in Asia and Europe, the benchmark S&P 500 plunged 3.4%, erasing its gains for the year in its biggest fall since trade tensions rattled markets in February 2018.

The FTSE All-World index lost 3%.

Investors flocked to the safety of government debt, pushing the yield on the US 10-year Treasury bond down 10.2 basis points to 1.369%, just above its record low, as expectations grew that the Federal Reserve would be pushed to cut interest rates by April.

Energy stocks led the stock market decline, driven by a weakening oil price, followed by technology shares. Advanced Micro Devices dropped 7.8% amid concerns the outbreak would disrupt computer-chip supply chains.

Transport stocks were also battered, with American Airlines, Delta and FedEx all dropping more than 5%, while the KBW index of US banks fell 3.6% — its worth day since August.

President Donald Trump responded by tweeting that the coronavirus was “very much under control in the USA”, adding: “Stock Market starting to look very good to me!”

Earlier, European bourses had borne the brunt of the sell-off on fears about the impact of the virus on the global economy.

UK stocks had their worst day for five years and Italy’s MIB index dropped 5.4% in its largest fall since 2016.

“This is no longer solely an Asia issue,” said Robert Carnell, chief Asia-Pacific economist at ING.

In Europe, the continent-wide Stoxx 600 fell 3.8%, while the UK’s FTSE 100 dropped 3.3%. Airlines and tour operators were hit hard, with shares in easyJet falling 17% and Ryanair sliding 13%.