Asian stocks traded sharply lower on Thursday after President Donald Trump suspended all travel to the US from mainland Europe in a bid to slow the spread of the coronavirus.
It followed steep losses on Wall Street, with the Dow Jones plunging by almost 1,500 points, or 5.8%.
The Dow is now more than 20% below its recent high, a threshold that often accompanies a recession.
Japan’s benchmark Nikkei 225 fell by more than 4.5% in morning trade, while the Hang Seng in Hong Kong lost 3.8%, and China’s Shanghai Composite was 2% lower.
The falls came after Mr Trump suspended all travel from Europe to the US for 30 days starting on Friday in order to fight the coronavirus outbreak.
In a televised address from the Oval Office, Mr Trump said the restrictions did not apply to the UK.
He also announced financial relief for US workers who are ill, quarantined or caring for others due to the illness. The emergency action will also see the US Treasury Department deferring tax payments without interest or penalties for certain businesses and individuals affected.
At the same time the US government will provide capital and liquidity to small firms affected by the outbreak.
Earlier, US stock indexes closed sharply lower, with the Dow Jones Industrial Average losing 5.8%, the S&P 500 down 4.9%, and the Nasdaq 4.7% lower.
It means the Dow is now 20% below its recent high, pushing it into what is known as a ‘bear market’. That brings to an end the longest-ever streak of gains for US stocks, which started in 2009.
“It is not the virus itself, but rather the fear and panic related to the virus and the associated altered economic behaviour that could be a damaging tipping point, forcing the global economy onto a darker path,” said Katrina Ell, a senior economist at Moody’s Analytics.
Markets have also been slammed this week by a plunge in oil prices, after oil exporters said they would increase output rather than make coordinated cuts. After Mr Trump’s address oil prices were down more than 6.5%.