NEW YORK (Reuters) - Global equity markets tumbled and the dollar slid on Thursday as the coronavirus spread quickly outside China, leading Britain to prepare for a significant increase in cases and France to say it appeared “inevitable” the outbreak would become an epidemic in the country.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020. REUTERS/Andrew Kelly

HSBC in London sent more than 100 staff home and Italy’s UniCredit told some staff the same, while companies began issuing profit warnings. Southwest Airlines Co said it expected a hit of up to $300 million to first-quarter operating revenue.

In Britain, regional airline Flybe collapsed, making it the industry’s first big casualty of the outbreak, and broadcaster ITV fell 12.0% after warning that ad revenue for April could fall about 10% as travel companies deferred campaigns.

Three more people died from a coronavirus infection in France, taking the total to seven, and Britain logged its first death from the pathogen. The number of people in New York state who have tested positive for the virus doubled to 22 following a significant increase in testing.

“I thought 2020 would be the year of the election, but it turns out it’s the year of the virus, and it’s going to dominate everything in the global economy this year,” said David Kelly, chief global strategist at JPMorgan Asset Management.

The Institute of International Finance cut its forecast for the U.S. and Chinese economies, and warned that global growth could be the weakest since the financial crisis.

Global growth in 2020 could approach 1%, far below last year’s 2.6% expansion, the Washington-based financial industry association said. The pandemic has spread to 80 countries and has killed more than 3,000 worldwide.

In Wuhan, the Chinese epicenter of the epidemic, an expert with the country’s top panel battling the illness said the city will likely see new infections drop to zero by the end of March. Total cases in China rose to 80,409.

In Italy, where the virus has hit Europe the hardest, the Civil Protection Agency said the death toll rose by 41 from Wednesday to 148, with the contagion showing no sign of abating.

U.S. stocks fell sharply and European equities snapped a three-day winning streak as the epidemic’s advance darkened the mood. A day earlier, Wall Street rose on former Vice President Joe Biden’s strong performance in the Democratic nomination campaign and the U.S. House of Representatives’ approval of an $8.3 billion funding bill to combat the coronavirus. The Senate passed the legislation on Thursday.

MSCI’s gauge of stocks across the globe shed 1.89%, while emerging market stocks were little changed.

The pan-European STOXX 600 index lost 1.43%.

On Wall Street, the Dow Jones Industrial Average fell 969.58 points, or 3.58%, to 26,121.28. The S&P 500 lost 106.18 points, or 3.39%, to 3,023.94 and the Nasdaq Composite dropped 279.49 points, or 3.1%, to 8,738.60.

The benchmark S&P 500 closed down 10.7% from its closing all-time high recorded Feb. 19.

The dollar index slipped to an eight-week low as traders bet the U.S. Federal Reserve will cut interest rates further, and gold prices climbed about 1.5% to the highest in more than a week.

The Fed cut rates by one-half percentage point on Tuesday. Money markets are pricing in another 25d-basis-point cut at the next Fed meeting in two weeks and a 50-basis-point cut by April.

The dollar index fell 0.826%, with the euro up 0.89% to $1.1233, a 2020 high.

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The Japanese yen strengthened 1.38% versus the greenback at 106.09 per dollar.

U.S. Treasuries rallied as investors worried about the economic implications of increasing quarantines.

Corporate mergers could shrink in number by as much as 25% this year as executives fret about the coronavirus and the impact of this year’s U.S. election, said Blair Effron, co-founder of major M&A adviser Centerview Partners

U.S. economic data still does not show the impact from the coronavirus. The number of Americans filing for unemployment benefits fell last week. Labor market strength was underscored by other data showing planned job cuts by U.S.-based employers fell sharply in February.

The epidemic’s impact is not showing up in data but the storm is approaching, Kelly said.

“We have not seen the eye-wall of this storm yet. But it will gradually fade and, as it does, the global economy will pick up relatively quickly in 2021,” he said, a consideration investors need to take into account and to not panic.

Benchmark 10-year notes rose in price to push their yield lower to 0.912%.

Oil prices edged lower, but losses were limited as the Organization of the Petroleum Exporting Countries (OPEC) agreed on deeper output cuts to bolster prices.

Brent crude settled down $1.14 at $49.99 a barrel. U.S. West Texas Intermediate slid 88 cents to settle at $45.90.

U.S. gold futures settled 1.5% higher at $1,668 an ounce.