Asian stock markets plunged further on Friday owing to coronavirus fears, deepening a global rout after Wall Street endured its biggest one-day drop in nine years.

Tokyo’s benchmark plummeted by an unusually wide margin of 3.7%, and Seoul and Sydney dropped by more than 3%. Hong Kong and Shanghai fell over 2.5%.

Oil prices also slumped on expectations that industrial activity and demand might contract.

Investors had been confident that the disease which emerged in China in December might be under control. But outbreaks in Italy, South Korea and Iran have fuelled fears that the Covid-19 virus is turning into a global threat which might derail trade and industry.

Anxiety intensified on Thursday when the United States reported its first virus case in someone who had not travelled abroad or been in contact with anyone who had.

Financial Markets Wall Street
Stock declines show on monitors at the New York Stock Exchange (Craig Ruttle/AP)

On Wall Street, the benchmark S&P 500 index ended down 12% from its all-time high a week ago.

A growing list of major companies are issuing profit warnings and say factory shutdowns in China are disrupting supply chains. They say travel bans and other anti-disease measures also are hurting sales in China, a major consumer market.

Virus fears “have become full-blown across the globe as cases outside China climb”, Chang Wei Liang and Eugene Leow, of Singapore bank DBS, said in a report.

Tokyo’s Nikkei 225 tumbled to 21,025.76, while the Shanghai Composite Index lost 2.6% to 2,914.31. Hong Kong’s Hang Seng lost 2.6% to 26,081.87.

The Kospi in Seoul fell 3.4% to 1,984.10 and Sydney’s S&P-ASX 200 sank 3.3% to 6,441.20. India’s Sensex was trading 2.8% lower at 38,653.65.

The New Zealand and Southeast Asian markets also retreated.

Hong Kong Financial Markets
People walk past an electronic board showing the Hong Kong share index (Kin Cheung/AP)

Markets in China and Hong Kong had been doing relatively well in recent weeks despite anxiety over the virus.

On the mainland, authorities flooded markets with credit to shore up prices after trading resumed following an extended Lunar New Year holiday.

Chinese investor sentiment has also been buoyed by promises of lower interest rates, tax breaks and other to help revive manufacturing and other industries.

However that confidence was shaken as the S&P 500 fell 4.4% on Thursday to 2,978.76.

The Dow Jones Industrial Average shed 1,190.95 points, its largest one-day point drop in history, taking its loss for the week to 3,225.77 points, or 11.1%. To put that in perspective, the Dow’s 508-point loss on October 19 1987 was equal to 22.6%.

“It is a race to the bottom for US indices,” Jingyi Pan, of stockbrokers IG, said in a report. “It may still be too early to call a bottom given the uncertainty around the matter of the coronavirus impact.”

Investors came into 2020 feeling confident the Federal Reserve would keep interest rates at low levels and the US-China trade war posed less of a threat to company profits after the two sides signed a truce in January.

The S&P 500’s decline puts the index into what market watches call a correction.

Financial Markets Wall Street
Traders work on the floor of the New York Stock Exchange (Craig Ruttle/AP)

Some analysts have said that was long overdue in a record-setting bull market, though Mizuho Bank noted it was “the fastest correction since the Great Depression” in the 1930s.

US bond prices soared as investors fled to safe investments. The yield on the benchmark 10-year Treasury note fell as low as 1.24%, a record low, according to TradeWeb.

China has shut down much of its economy to stem the spread of the infection.

Authorities are shifting to trying to reopen factories and other businesses in areas with low disease risk but travel controls still are in effect in many areas.