Stock markets sank Wednesday after US President Donald Trump warned of "a very, very painful two weeks" to come for the United States, whose coronavirus death toll has overtaken that of China.
European equities fell hard, with London down 3.5 per cent nearing midday. Tokyo earlier closed down 4.5 per cent.
Adding to the gloom, UK banks axed billions of pounds (dollars) in shareholder dividends and stock buybacks after the Bank of England requested the move to boost liquidity as part of measures to stimulate the virus-hit economy.
Investor sentiment in Europe was also knocked by poor manufacturing survey data, jangling market nerves before Friday's key US non-farm payrolls figures. The euro dropped against the dollar and pound.
"Trump's warning is the primary driver of today's downturn," Oanda analyst Craig Erlam told AFP.
"It's such a shift from his previous views on the impact of the coronavirus and finally an acceptance of how severe the situation is."
Asian bourses also dropped after a dire first quarter for markets, with traders contemplating the prospect of lengthy lockdowns as the coronavirus continues its deadly sweep across the planet.
"Donald Trump reflected the mood as he warned of weeks of pain still ahead -- a stark change from his rather casual approach thus far," noted Markets.com analyst Neil Wilson.
With the number of infected and dead still surging in Europe and the United States, hopes are fading that strict containment measures keeping billions of people at home will be lifted any time soon.
That, in turn, is stoking uncertainty about the outlook for the global economy -- which is widely expected to slip into recession this year -- while there are also concerns about how long any recovery will take.
Trump has meanwhile extended social distancing and stay-at-home orders for another 30 days to the end of the month, while members of his virus task force warned almost a quarter of a million Americans could die from the disease.
"The demand shock for oil and for the global economy more broadly will be more significant if mobility and social interaction restrictions stay in place beyond April," said AxiCorp's Stephen Innes.
"The real question for investors isn't how shockingly bad the first quarter is going to be -- it's how long the weakness will persist and, as a consequence, how much permanent damage will be done."
Oil meanwhile slid Wednesday, as Saudi Arabia began ramping up output as it presses on with a price war against Russia.
However, there was some support after Trump said he was ready to hold talks on the issue as he frets over the hit to US energy firms from the plunge in the crude market.
"They're going to get together and we're all going to get together and we're going to see what we can do," Trump said.
"Because you don't want to lose an industry. You're going to lose an industry over it."
World oil prices are languishing close to 18-year lows at around USD 20 per barrel, having plunged by some 65 per cent in the first quarter.
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