Traders are warning that the 'worst is yet to come today' after the New York stock exchange suffered its biggest ever drop and £152billion was wiped off FTSE shares.

European and US stock markets slumped painfully again Thursday as new coronavirus infections spread outside China, exacerbating fears of a global slowdown.

While the markets in Shanghai and Hong Kong closed higher, Europe and New York saw a sea of red. London, Frankfurt and Paris all posted losses of more than three percent on the day.

Wall Street also took a beating, with major indices shedding more than four percent in what is shaping up to be the US market's worst week since the 2008 financial crisis.

The Dow shed nearly 1,200 points, or 4.4 percent, taking its losses for the week to more than 11 percent.

Oil prices plunged by more than four percent at one point before recovering somewhat, while the yen gained as traders turned to a traditional haven in times of economic turbulence.

'There was more coronavirus carnage on the markets,' Spreadex analyst Connor Campbell said.

This is 'one of the worst weeks in recent memory and terrifyingly, it's not over yet,' he said. 'Friday is a tricky proposition.'

TODAY: The S&P 500 has lost 2 percent of its value as of midday trading

TODAY: The FTSE 100 lost over 3 percent of its value, shedding £62billion

THIS WEEK: The S&P 500 is down 10 percent from last week's record high

THIS WEEK: The FTSE 100 has shed £152billion this week, as the market hit a new low

Mask-clad pedestrians walk past an electronic quotation board displaying share prices of the Nikkei 225 Index in Tokyo

The benchmark index has now dropped 8 percent in four days amid concerns over more turmoil, with traders warning the virus could lead to 'anaemic global growth'.

The Dow Jones Industrial Average slid 2.2 percent down 599 points to 26, 367. Earlier yesterday, it was down as much as 960 points. The Nasdaq slid 2.5 percent.

Meanwhile American Airlines fell 5.2 percent as airlines continue to feel pain from disrupted travel plans and suspended routes.

The yield on the 10-year Treasury fell further into record low territory, to 1.28 percent from 1.31 percent late Wednesday.

The market's sharp drop this week partly reflects increasing fears among many economists that the U.S. and global economies could take a bigger hit from the coronavirus than they previously thought.

Earlier assumptions that the impact would largely be contained in China and would temporarily disrupt manufacturing supply chains have been overtaken by concerns that as the virus spreads, more people in numerous countries will stay home, either voluntarily or under quarantine. Vacations could be canceled, restaurant meals skipped, and fewer shopping trips taken.

The Dow Jones Industrial Average and S&P 500 each fell 4.4%. Britain's FTSE 100 index slid 3.5% and Japan's Nikkei ended 2% lower

The Dow shed nearly 1,200 points, or 4.4 percent, taking its losses for the week to more than 11 percent (stock image)

'A global recession is likely if COVID-19 becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in Italy and Korea,' said Mark Zandi, chief economist at Moody's Analytics.

'This is a market that's being driven completely by fear,' said Elaine Stokes, portfolio manager at Loomis Sayles, with market movements following the classic characteristics of a fear trade: stocks are down, commodities are down and bonds are up.

Stokes said the swoon reminded her of the market's reaction following the September 11, 2001 terrorist attacks.

'Eventually we're going to get to a place where this fear, it's something that we get used to living with, the same way we got used to living with the threat of living with terrorism,' she said. 'But right now, people don't know how or when we're going to get there, and what people do in that situation is to retrench.'

The winners and losers from today's panic EasyJet has suffered harder than most, with shares collapsing 28 percent in a week , as holidaymakers postpone short-haul trips and businesses reduce travelling.

has suffered harder than most, with , as holidaymakers postpone short-haul trips and businesses reduce travelling. The Luton-based airline's market capitalisation today was about £4.3billion, meaning it has lost more than £1.5billion from its value of £5.9billion at the start of the week.

However there was better news for other businesses, such as Dettol maker Reckitt Benckiser which revealed sales of cleaning and hygiene products have increased .

. But the world's largest brewer Anheuser-Busch InBev forecast a 10 percent decline in first-quarter profits after the virus hit beer sales during the Chinese New Year. Advertisement

Microsoft and Budweiser maker InBev became the latest to warn investors about the virus' potential hit to their finances. Japan's stock markets closed down 2.1 percent.

IG trading group analyst Joshua Mahony said 'what was a centralised focus on Italian containment efforts has now turned into a European-wide crisis as new cases pop up throughout the continent'.

President Emmanuel Macron said France was preparing for a surge in the number of cases, adding: 'We are facing a crisis, an epidemic.'

Airlines and holiday firms were among those worst hit, with shares in easyJet down 11 percent, BA owner IAG falling 10 percent and TUI dropping 9 percent.

Companies are reporting how the outbreak was hitting profits and trading, with Aston Martin warning that Chinese customers are falling.

Meanwhile, Asian-focused bank Standard Chartered warned the economy in the region was taking a hit and Microsoft said computer sales were suffering.

It comes after stocks appeared to recover in Europe yesterday following two days of heavy falls, with the FTSE 100 rising 0.35 per cent or 25 points to 7042.

Almost £100billion was wiped off the value of the FTSE 100 on Monday and Tuesday as the virus spread, with the blue-chip index hitting a 12-month low.

Pedestrians walk past a board showing data at Tokyo's Nikkei Stock Average in Japan today

Top ten biggest fallers on FTSE 100 today WPP - 16.4% easyJet - 10.6% International Airlines Group - 10.2% Evraz - 10.1% Carnival - 9.5% TUI - 8.5% Flutter Entertainment - 7.1% Barclays - 7% Persimmon - 6.9% Legal and General - 6.7% Advertisement

Some traders had expected stock markets needed a 'correction' because they had been trading at record levels in recent months.

But others were questioning whether this was more than a correction.

Ipek Ozkardeskaya, of Swissquote bank, said: 'The slide we are seeing right now is not the correction of the recent stock rally, but the market's understanding that the coronavirus outbreak would translate into significantly lower earnings and an anaemic global growth.

'If we add the fact that the crisis has only started outside China into the mix, there is a meaningful shift in stock valuations.'

US traders work on the floor of the New York Stock Exchange on Wall Street yesterday

Two more people test positive in England for coronavirus Two more people have tested positive for coronavirus in England, the Department of Health said. The two patients have been transferred to specialist NHS infection centres after contracting the virus in Italy and Tenerife, according to England's chief medical officer Professor Chris Whitty. The new cases bring the total number of people diagnosed with Covid-19 in the United Kingdom to 15. Italy has reported that the number of people infected in the country grew to 447 and 12 people have died. And 168 Britons have been told to isolate themselves at the H10 Costa Adeje Palace in Tenerife. Advertisement

Hopes were dashed yesterday when stock markets in the US rose in the morning, but as the day progressed they fell, with traders unimpressed with an intervention from President Trump.

Experts have warned savers to expect more turmoil, and urged them not to panic-sell. Emma Wall from Hargreaves Lansdown said: 'Coronavirus is, and will continue, impacting markets.

'That does not necessarily mean long-term investors should be overly concerned.

'Timing the market is notoriously difficult, even professionals get it wrong.

'Trading on news events can often lead to bad outcomes - panic selling often locks in losses, and jumping back into the market is hard to do.'

Rebecca McVittie of Fidelity International said 'we should anticipate that this environment of heightened volatility continues.'