Right! I think it’s time for a recap, as traders on Wall Street catch their breath after a shocking day of selling.

World stock markets have suffered their worst day since the global financial crisis of 2008, as fears of a global recession swell.

Hundreds of billions of dollars, euros and pounds were wiped off stocks across the world, in an alarming sell-off.

A collapse in crude prices, triggered by an oil price war, spooked markets which were already reeling from the coronavirus outbreak.

The day began with heavy losses in Asia-Pacific; Australia fell over 7%, while the Nikkei fell over 5%.

In London, the FTSE 100 plunged by 7.7% in a slump led by the energy sector. That put the Footsie into a bear market - down over 20% since January.

More than £125bn was wiped off the Footsie today, extending its recent rout, with BP (-19%) and Royal Dutch Shell (-18%) badly hit.

Other European markets plunged by around 8%, exceeding their worst losses during the debt crisis. Italy’s FTSE MIB tumbled by 11%, after Rome announced plans to quarantine millions of people, as its coronavirus deaths kept rising.

Wall Street picked up the selling baton, and promptly found trading briefly suspended after tumbling 7% -- triggering a circuit breaker. Once trading resumed, the main indices resumed their losses -- posting their worst day since 2008 as well.

Tech shares, banks and energy companies all suffered badly. Apple fell 7.9%, Chevron lost 15% and JP Morgan declined by 13%, in a day when any risers were very rare, and volatility hit an 11-year high.

Saudi Arabia’s threat to boost oil production and cut prices sent Brent crude down to just $34 per barrel tonight, down 23% today.

Former Treasury secretary Larry Summers, demanded a co-ordinated response to address the impact of Covid-19. Analysts fear that the global economy is heading for very rocky waters due to the coronavirus crisis.

Oxford Economics has warned tonight:

• From an economic perspective, the key issue is not just the number of cases of COVID-19, but the level of disruption to economies from containment measures.
• Disproportionate action will weaken economic activity and potentially induce panic, increasing the chances of investment and consumer spending being delayed or scrapped.
• Actions to control the spread of the virus outside China have been larger than we envisaged even a couple of weeks ago. What’s more, additional restrictions are likely to be rolled out in economies that are particularly exposed to the virus, which will offset any temporary boost to demand from panic buying

We may see MORE losses in Asia and Europe tomorrow, judging by the overnight futures markets.

Here’s Kyle Rodda of IG to set the scene (and perhaps give us nightmares):

Panic grips global markets: Trading conditions in global markets can appropriately be described as panicked. Already vulnerable amid the unfolding coronavirus crisis, Saudi Arabia’s pledge to flood global oil markets with extra supply kicked market participants in the guts at precisely the worst possible time. The tumble in global stock markets looks familiar to what’s been experienced the last 3 weeks. But there was a difference to yesterday’s sell-off. Market fundamentals have changed again, and they’ve changed for the worse.

Oil’s plunge sparks credit risk: Oil prices were belted on Monday, plunging by as much as 30 per cent, as traders priced-in the impacts of an extra 10 million barrels per day of Saudi oil supply. The drop-in oil prices is raising concerns that highly leveraged oil companies, many of which that dominate the US junk bond market, will fall into a state of unprofitability, and lack the means to meet their debt obligations. This credit risk is rippling through corporate bond markets, and raising the chance of financial contagion....

Another day of losses for ASX200: It’s setting up Australia’s ASX200 for another 273 point fall according to SPI Futures. The move will come following yesterday’s 7.3 per cent loss – its biggest daily loss since October 2008. The energy sector was the biggest loser, tracking the fall in the price of oil, close the day’s trade 20 per cent lower. The financial sector subtracted the most from the mark in terms of points-lost. It cut 136 point from the index, as investors continue to dump banks in a falling rate environment.

Newsflash: the US stock market has suffered its worst one-day slump since 2008, and the depths of the last financial crisis.

After a frightening day of losses, the main indices have all tumbled by over 7%.

The Dow has shed 2,000 points -- almost twice its worst daily points slump, to 23,839 points. That’s a plunge of 7.8%, matching the worst days during the financial crisis over 11 years ago.

The S&P 500 also had a truly dreadful day, slumping by 7.6% or 225 points to 2,746.

Such a dramatic rout shows that Wall Street is bracing for something Very Nasty -- such as a coronavirus epidemic, a recession, and some serious financial distress among companies and households.

Today’s slump isn’t a repeat of Black Monday in 1987. It’s a lot more serious!

So argues our economics editor Larry Elliott today:

The working week began in the City of London with oil prices down by 30% and the leading barometer of UK shares registering falls of more than 8%, so it didn’t take long for it to be dubbed Crash Monday.

To be sure, those with long enough memories would have been able to recall a similar market panic in October 1987, when a wave of selling began in east Asia and rolled inexorably westwards.

That, though, is about as far as the comparison goes, because the 2020 Black Monday is a lot more serious than the one 30-odd years ago. With a bit of encouragement from central banks, financial markets quickly regained their poise after the 1987 crash and resumed a long upward climb that only came to an end with the financial crisis of 2007.

It won’t be nearly so simple to pull off that trick this time. For the past decade, the underlying fragility of the global economy has been masked by perpetually low interest rates. Cheap money has been the fuel for rocketing asset prices – shares and bonds in particular – but has done little to boost investment and historically weak productivity growth....

More here:

Wall Street’s Fear index, the VIX, has hit its highest level since 2008 today - a clear sign of market panic.

And astonishingly, it was initially hard to actually trade the VIX due to the market turmoil.

Reuters explains.

Trading in options on Wall Street’s fear gauge was impossible in the first minutes of Monday’s session due to a complete absence of prices from the market makers on whom trading depends, a representative of index operator CBOE Global Markets Inc (CBOE.Z) said. CBOE Senior Trade Desk Specialist Ryan Stone told Reuters that VIX options were tradable at 9:51 a.m. ET (1351 GMT) but a lack of liquidity led to a lag of about seven minutes until the first trade, around 9:58 a.m. ET.

When activity in options resumed, the VIX surged to its highest level since December 2008. The volatility spike occurred as global stock markets were melting down on fears about the spreading coronavirus and crashing oil prices

U.S. President Donald Trump will meet with U.S. Treasury Secretary Steven Mnuchin and other economic officials later on Monday to weigh possible actions to stem the fallout over the coronavirus, an administration official told Reuters.

The Trump administration is weighing a number of potential policy steps, including paid sick leave, the official said.

Larry Summers, former US Treasury secretary, is trying to bang heads together on Bloomberg TV.

Summers believes a US recession is now “more likely than not”. He says the White House needs to produce a co-ordinated response, that involves various parts of the US administration, other governments, and international bodies.

It should be comprehensive, Summers continues. It needs to tackle the financial challenges caused by lack of credit, the need to maintain economic demand when pay cheques are being cut back, and shore up investment.

However, we are “not close” to having such a comprehensive, coordinated and coherent plan now, he warns.

Oil giants BP and Royal Dutch Shell led the FTSE 100 fallers tonight, tumbling by 19% and 18% respectively in London today.

That makes sense, given crude prices still down 20% today after Saudi Arabia launched its oil price war over the weekend, vowing to cut prices and boost output.

Other top fallers included cruise firm Carnival, down 15%, and mining companies Glencore (-12%) and BHP Group (-16%). Demand for foreign holidays, iron ore and coal are all being hammered today, by coronavirus recession angst.

They all helped to push the FTSE 100 down by 7.7%, or almost 500 points, tonight.

In the end there was one solitary riser - precious metals producer Polymetal. It gained 0.5%, after anxious customers pushed the gold price to a seven-year high today.

Newsflash: Britain’s FTSE 100 has plunged into a bear market, after its worst day in over a decade.

The index of leading blue-chip shares has just closed for the night, down 496 points or nearly 7.7% at 5,965 points.

That wipes £124bn off the value of the companies on the FTSE 100, as global recession fears, Covid-19 worries and the shock of an oil price war rattle the City.

We’ve not seen such a big daily fall since early October 2008, after the collapse of Lehman Brothers triggered the worst financial crisis in decades.

It also means the FTSE 100 is more than 20% below its recent peak, of 7674 points, set on 17th January. In City parlance, that means we’re in a Bear Market.

If the stock market crash isn’t bad enough, the fallout in the US bond markets is perhaps even scarier to contemplate - particularly given a boom in risky borrowing by US oil and gas firms in recent years.

Deutsche Bank has just issued a note warning there could be a “Minsky moment” for high-yield American bonds - in a nod to the economist Hyman Minsky’s theory on how markets can crash amid widespread panic following periods of speculative investment.

The US subprime collapse of 2008 is regarded as one such moment, so the comparison is ominous to say the least...

The bank’s analysts warn that defaults - companies being unable to repay or refinance their debts - are now inevitable, with around $13bn of debts due for repayment before the end of 2021 from the most heavily-indebted oil and gas firms.

In a shocking sign of the chaos to come, it says the distress ratio for US oil and gas high yield debt - defined as the proportion of debt trading with a spread of at least 1,000 basis points (in other words, bonds with yields that are more than 1,000 basis points higher than a reference yield such as on a US Treasury bond) - was already 62.3% as of Friday before today’s oil price collapse.

To put that in context, it says the distress ratio hit 43.9% in March 2016 when oil prices last crashed. In good times, when the oil price peaked in late 2018, it was 4.8%. In other words, well more than half of heavily-indebted US energy companies have borrowing costs that are going through the roof. Gulp.

In another illustration of how risky the situation is, Standard & Poors says the percentage of oil and gas borrowers with negative outlooks on their credit rating - which gauges their financial strength and is key for borrowing money on reasonable terms - is around 33%, which is well above the long-term average of 19%.

Central bankers have been worrying about the US high yield bond markets for quite a while now already. This could be the start of something quite dramatic indeed.

Bang on cue....

Today’s rout has pushed America’s S&P 500 index of shares to its lowest since June 2019.

The Dow (which contains just 30 of America’s biggest, most famous companies) has troughed to its lowest since January 2019.

US investors might think they’re getting off lightly -- Britain’s FTSE 100 is at its weakest point since 2016 (when a Brexit-weakened pound started driving shares up).

Meanwhile in London, stocks are sliding deeper into the red... as my colleague Kalyeena Makortoff reports:

“This is a meltdown, this is an absolute meltdown,” says Michael Baker, who is leading the sales team at spread-betting firm ETX Capital.

Traders are hollering across banks of desks, yelling out trades. They’re trying to figure out which stocks are trading in the US after the S&P 500 was briefly halted following its 7% fall a moment ago.

You can barely hear anyone over the calls and trading notifications, sounding like alarms across the office.

“I can’t buy mate, it’s limit down,” one trader yells. “Just tried to buy the Nasdaq - but I can’t,” another says.

Not everyone is being pessimistic, with one trader yelling that at least one high net worth client had put in an order to buy hundreds of US shares. (No word over whether that is a bet that has any chance of paying off, though)

Newsflash: Trading has been briefly suspended on the New York stock exchange.

The 7% plunge on the S&P 500 has triggered automatic circuit breakers, which are designed to prevent a market meltdown.

Trading is now on hold for 15 minutes, to let investors catch their breath.

But European markets aren’t suspended -- they’re plunging further into the red, with the FTSE 100 now down 8.3% today (its worst rout since 2008).

NEWSFLASH: The US stock market has plunged by nearly 7% at the start of trading.

The Dow Jones industrial average has tumbled by 1,758 points -- or almost 7% -- as Wall Street joins the global selloff.

That’s the Dow’s biggest points slump ever -- and on track for its worst day in percentage terms since 2008.

The S&P 500 index, which is a broader measure of US companies, is also down more than 6%, with oil companies and banks among the biggest fallers.

Paul O’Connor, Head of the Multi-Asset Team at Janus Henderson Investors, has stuck his neck out and predicted that today COULD be a good time to buy....

He writes that investor ‘complacency’ has dramatically turned to ‘panic’, as the prospects of a global recession rise - triggering an urgent “broad-based de-risking”.

But in such turbulent times, there could be value out there.....

Whereas last week, investors were largely focused on trying to evaluate the potential impact of the coronavirus on global growth, they are now worried about scenarios involving self-reinforcing adverse market dynamics.

The oil shock has jolted the hitherto-resilient markets for high yield debt and emerging market bonds. The risk now is that investor redemptions will accelerate at a time when market liquidity is already under pressure. Still, the scale of the repricing has been so rapid today that value is already beginning to emerge.

Credit markets have gone from being overbought to oversold, overnight.

So in conclusion:

One thing we do know however is that markets are now in panic mode. While it would be foolish to try to call the bottom in the markets, we would rather be buying in this environment rather than selling. We are gradually rebuilding risk exposures into market weakness.

The key word here is gradually.....

Savers are nursing losses approaching 10% in their pension schemes since the start of the coronavirus market panic, while holders of share Isas have lost as much as a quarter of all their money in some funds, my colleague Patrick Collinson explains:

The stock market rout means someone who had accumulated £250,000 in their pension scheme at the start of this year will have seen it shrivel to about £225,000 on Monday.

Holders of final salary-style pensions, mostly in the public sector, lose nothing as their payouts are guaranteed. However, further falls in the market will mean these schemes will drop further into deficit, requiring employers (such as local authorities and universities ) to somehow find the cash to top them up.

One saving grace is that the vast majority of pension schemes invest less in “equities” (shares) than in the past, so a 5% fall in the market does not equate to a 5% fall in the total value of the fund. The typical pension fund is about 60%-65% in shares, with the rest in government and corporate bonds and property.

Gold hit a new seven-year high this morning, amid the mad dash for safe-haven assets.

One ounce of bullion jumped to $1,702 for the first time since 2013. It’s also trading at record levels in sterling terms,

Adrian Ash, director of research at online precious metals trader BullionVault, says demand for gold has soared since the coronavirus crisis escalated:

“Over the last 7 days, trading volumes on BullionVault have jumped 102% from the previous 52-week average, with more than £38.2m of gold, silver and platinum changing hands in total ($49.6m, €44.1, ¥5.2bn).

“Net of client selling, gold demand has risen 545.3% from the prior 52-week average, totalling 6 large bars last week, each weighing 12.5 kilograms.

America’s central bank is pumping tens of billions of dollars into the markets today, in an attempt to stop the financial system running out of liquidity.

The Federal Reserve has boosted its overnight repo operations from $100bn to $150bn.

That means there’s an extra $50bn on offer to US banks, who might be worried about lending to rivals in the current climate.

A repo operation allows a bank to access dollars, in return for handing over quality collateral such as US government bonds and mortgage securities. Such operations are typically in demand during times of financial stress.

On a trading floor near London’s Liverpool Street Station, the trading floor of spreadbetting firm ETX Capital is buzzing.

The firm has called in extra staff to deal with a surge in trades after oil plunged overnight and the European stock markets tumbled this morning.

ETX’s usual day team of about two or three traders has more than doubled, and will be bulked up to around 10 in the coming hours as they rev-up for the Wall Street open at 1:30pm UK time (corrected).

TV screens are set to Bloomberg and Sky News and banter between traders and dealers is intermittently being drowned out by a chorus of notifications. Phones are ringing, while terminals are bleating out a series of alerts - dings, slide whistles and simulated space gun blasts - signalling further market moves and flurry of new trades requests from clients.

Michael Baker, who is leading the sales team, says it will be all-hands-on-deck for at least 24 hours.

“It’s unprecedented,” he says, adding:

“We’ve not seen anything like this since the financial crisis.”

UK bank NatWest has announced a package of funding support worth £5bn for small businesses struggling to stay afloat as the coronavirus outbreak drags down the economy.

Alongside the funding, the majority government-owned bank will offer loan repayment holidays of up to six months, temporary emergency loans and fee-free borrowing.

In some respects, this is simply what a bank should always do – providing funds and flexible repayment terms to customers – but that NatWest feels the need to announce this package is illustrative of the scale of the stress facing firms.

It comes as pressure mounts on the Treasury and the Bank of England to slash interest rates and cut taxes to support families and companies. Clearly the banking system has a role to play as well.

Bjarne Schieldrop, chief commodities analyst at SEB, says Saudi Arabia has created a race to the bottom to sell Crude into the market:

“Saudi Arabia declared an oil price war this weekend, as OPEC+ departed Vienna on Friday without a deal. It’s still a slight hope that Saudi Arabia is playing this card in an effort to push OPEC+ members back to the negotiation table before the current production cuts expire at the end of March, however Russia is unlikely to bend to such power tactics.

“Saudi Arabia basically offered its oil on a fire-sale as it dropped its Official Selling Prices (OSPs) to all regions by $6-8 per barrel - the sharpest decline in Saudi Arabia’s OSPs in decades.

Saudi Arabia is undercutting everyone else by a mile, and as such it has created a race to the bottom where everyone must undercut each other in order to be able to sell their crude oil into the market.

The oil price is still languishing at its lowest since early 2016, down over 20% today.

• US crude: down $8.7 at $32.50 per barrel
• Brent crude: down $9 at $36.15 per barrel

This is a particular blow to America’s oil industry. Thousands of jobs could be lost at Houston, Texas, the centre of the US energy industry.

Speaking on Bloomberg TV, analyst Amrita Sen of Energy Aspects warned that “Houston is going to suffer so much, they’re already suffering...”

The oil price war has triggered turmoil in the currency market too.

Russia’s rouble has slumped by over 7% today (an astonishing slump) from 68 roubles to the US dollar to nearly 74.

Saudi’s decision to launch an aggressive oil price war - by cutting prices and boosting output - could hurt Russia’s economy badly, taking a massive chunk out of Moscow’s revenues.

Optimism among eurozone investors has absolutely crumbled this month, as the coronavirus crisis has raged.

The monthly Sentix survey of investor morale, just released, has slumped to -17.1 for March, down from +5.2 in February.

That’s the lowest reading since April 2013, when the eurozone debt crisis was raging, and even worse than expected. It shows that many experts expect Europe to slump into recession in 2020 (including Berenberg, as we reported earlier).

Sentix chief Manfred Huebner said “investors are preparing for a long period of economic weakness”, and urged policymakers to take action quickly.

As Sentix puts it:

The new coronavirus, which is now spreading significantly across the globe and requires consistent measures to contain it, is plunging the global economy into recession.

Never before has such a strong synchronised collapse of the global economy been measurable in our data.

The Saudi price war could drive oil prices below $30 a barrel for the first time since the 2016 oil price crash, according to market experts at S&P Global Platts.

The price reporting agency said a “reasonably aggressive” stance from the Saudis could see the Kingdom raise its production from 9.75 million barrels a day in the first quarter to 10.25 million barrels per day in 2Q.

But a “more aggressive and offensive” stance could see Saudi Arabia’s oil output surge to highs of 11 million barrel a day, enough to drive the oil price into the $20s for the first time since early 2016 if the coronavirus is not contained.

Meanwhile Russia is expected to raise its oil production by 300,000 barrels a day within the next three months before US shale oil producers are forced out of the market by lower prices.

Shin Kim, at S&P Global Platts, says

“All signs point to Saudi Arabia and Russia wanting to inflict maximum pain.

“At the very least to instigate as fast a response as possible from US shale producers and each other.”

The FTSE 100’s early-morning slump is one of the worst in history, reports Russ Mould, investment director at AJ Bell.

He suspects that investors are moving from the “panic” stage to the full-blown “capitulation stage”, as the coronavirus crisis escalates.

“Thinking about buying in today’s market is only for the brave and there remains considerable uncertainty about the spread of coronavirus and its effect on economies and society.

“By 9am the FTSE was trading 7.1% lower at 6,004 which put the index back to the levels seen before the EU referendum vote in early 2016.

“The index initially fell to 5,899 on Monday, representing an 8.7% decline which is the fourth biggest one-day fall on record. The worst falls were recorded on 19 October 1987 (-10.8%) and 20 October 1987 (-12.2%) during the Black Monday crash, and then on 10 October 2008 (-8.8%) as the global financial crisis unfolded.

“Very few stocks escaped the misery. In early trading on Monday funeral services group Dignity was among the stocks in positive territory, perhaps as investors predicted it would see an increase in demand. However, this rally was short lived and its shares quickly started to fall.

Germany bank Berenberg has forecast that the coronavirus will drag Europe’s economy into recession this year.

It has slashed its forecast for European growth, and sees a sharp downturn in Italy and Germany during 2020. It also believes the UK will only grow by 0.9% this year, even if the government boosts spending in Wednesday’s budget.

Berenberg’s Holger Schmieding explains:

• Italy: We now expect GDP to decline by 1.0% instead of 0.3% in Q2. With a downward revision to Q1 GDP from -0.1% to -0.8%, this takes our forecast for the full year 2020 to -1.2% from -0.3%.
  
  
• Eurozone: We now project that GDP will fall by 0.4% qoq in Q1 and 0.5% qoq in Q2 instead of stagnating in Q1 and falling mildly by 0.2% qoq in Q2. For full-year 2020, we look for a contraction of -0.1% instead of growth of 0.5%.
  
  
• Germany: We now look for declines in GDP by 0.2% and 0.6% qoq in Q1 and Q2 instead of falls by just 0.1% and 0.2%, respectively. That brings our annual forecast 2020 as a whole to -0.4% instead of 0%.
  
  
• France: We now expect GDP to rise merely by 0.1% instead of 0.2% qoq in Q1 and contract by 0.3% instead of advancing by 0.1% in Q2. For the full year 2020, we now look for growth of just 0.3% instead of 0.8%.
  
  
• UK: We reduce our 2020 call to 0.9% from 1.3% previously after lowering Q1 to 0.3% qoq from 0.4%, Q2 to 0.0% qoq from 0.3% and Q3 to 0.3% from 0.4%. We expect the UK to announce a sizeable fiscal stimulus in response to the virus-related disruptions on 11 March.

After a panicky open, the European stock markets are all suffering huge losses as well.

The Milan stock market is absolutely tumbling, after Italy’s government sealed off large swathes of its country in an attempt to combat Covid-19.

This has dragged the FTSE MIB index of Italian shares down by 10% - a proper crash.

The selloff is dragging the EU-wide Stoxx 600 index into a bear market, alongside the FTSE 100.

The FTSE 100 is now more than 20% off its recent peak -- which means we’re in Bear Market territory.

Back in January, the blue-chip index was trading over 7,600 points -- some 22% higher than this morning’s trough.

As you can see, the slump began two weeks ago -- after it became clear that Covid-19 was spreading across the globe, with a spike of cases in Italy.

This means the nation’s pension pots, ISAs and other savings will have suffered very severe damage this year.

Money is absolutely pouring into government bonds, as investors try to find somewhere safe to put their money.

This is forcing prices to stratospheric highs, which pushes the yield (or interest rate) to new lows.

The yield on Britain’s two-year government bonds (or gilts) has just fallen below zero.

That means the UK government could effectively borrow for free, and simply return the money in 2022. A good sign? Hardly.

The yields on US Treasury bonds are also falling again to fresh record lows.

It suggests the markets are very pessimistic about growth and inflation prospects, and highly reluctant to own shares this morning.

This morning’s tumble, below 6,000 points, means the FTSE 100 is languishing at its lowest point since summer 2016.

Saudi Arabia’s decision to launch an oil price war, and the deepening coronavirus crisis, are a toxic combination for markets.

Kyle Rodda of trading firm IG explains:

Markets have gone into panic mode, pure and simple. The fall-out between the Russian and Saudis has lead the Saudis to pledge over the weekend that it will flood the global oil market with supply, in order exert their will over oil prices.

The plunge in the oil price has raised major credit risks in financial markets, which are already reeling from the expected slowdown in global growth because of the coronavirus.

Here are the top fallers on the FTSE 100, as panicky investors ditch stocks.

Shares in international equipment rental firm Ashtead is now leading the rout -- its business would be badly hurt by a global recession.

There are still no risers.

NEWSFLASH: The FTSE 100 index has plunged by over 8.5%, on track for its worst one-day fall since 2008.

The index of top blue-chip shares has slumped by around 565 points, or 5895, as trading gets under way. Every stock is in the red, hit by fears of a global recession.

Oil giants are leading the rout, with BP down 27% and Royal Dutch Shell losing 20%, following the oil-price war launched by Saudi Arabia over the weekend.

The oil price has suffered an astonishing plunge overnight.

Brent crude slumped by 30% at the start of trading, after Saudi Arabia effectively launched an oil price war against competitors such as Russia and the US.

After failing to get Russia’s agreement for major supply cuts, Saudi authorities retaliated by slashing export prices and boosting production.

This sent Brent crude reeling to just $31 per barrel at one point -- its lowest since 2016 - down from $45 on Friday night.

It’s the biggest single fall since the start of the first Gulf war in 1991, and there’s chatter that the price could fall even lower if other players retaliate.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Tin hats on! Global stocks markets are facing their worst day since the financial crisis of 2008.

The escalating coronavirus crisis, and the eruption of an oil price war between Saudi Arabia and Russia, are triggering a massive wave of selling today.

Asia-Pacific stock markets have been severely hit already. Fears that Covid-19 will trigger a global recession has sent investors reeling, with Japan’s Nikkei slumping by 5%.

Australia’s market has tumbled by a shocking 7%, its worst day since the crisis.

European markets are heading for similar losses - Britain’s FTSE 100 is being called down 600 points, or over 9%, when the new trading week begins. We’ve not seen such a severe loss since the aftermath of Lehman Brother’ collapse a decade ago.

This would plunge European markets into a full-blown bear-market --- wiping 20% off their recent peaks.

Trading in US stock market futures has been frozen overnight, after falling 5%:

Italy’s decision to quarantine 16 million people has triggered turmoil in the markets, as investors try to assess which other countries will take similar measures -- and its impact on growth.

Ratings agency Moody’s has already weighed in, warning that the risk of a global recession was rising as the spread of the coronavirus causes a simultaneous supply and demand shock throughout the world economy.

As my colleague Martin Farrer writes:

Stock markets in Europe and the United States are braced for their biggest falls since the 2008 financial crisis after the start of the trading week saw panic selling amid the double threat of a coronavirus-driven global recession and an oil-price war.

It follows huge losses on Asian markets on Monday where fears about the worsening worldwide economic slowdown were exacerbated by the shock decision by Saudi Arabia over the weekend to increase oil production in an attempt to drive competitors such as Russia and the US out of the market.

We’ll be tracking all the action through another dramatic day -- which will also see a new test of eurozone investor confidence:

The agenda

• 9.30am GMT: The Sentix survey of eurozone investor confidence: expected to plunge to -12.2, from +5.2