Following more heavy losses in US and Asian markets overnight, the FTSE 100 index plunged another 3.3% to 6,570 in early trade led by travel and leisure stocks, with losses extending to every sector.
The S&P 500 index lost 4.4% on Thursday, its worst trading session since 2011, while Asian markets have been in freefall with China's CSI 300 index, Japan's Nikkei and Korea's Kospi index all closing 3.7% lower.
According to Bloomberg estimates, global markets have lost $6,000bn in value since the first reports of the coronavirus outbreak in China on 20 January.
Today's move in the FTSE comes after a 3.5% decline yesterday and takes losses for the week to 867 points or almost 12%.
Meanwhile, Brent crude prices continued to fall, losing another 1.4% to $50.70, while gold prices also dipped 0.8% to $1,632/oz after hitting seven-year highs this week.
However, the pound gained against the dollar to $1.288 as markets start to factor in the likelihood of a US rate cut to support economic growth.
Chief executive David Schwimmer focused on the upside potential of his deal to buy Refinitiv given 'its highly complementary capabilities in data, analytics and capital markets as well as deep customer relationships across a global business.' However market regulators in Europe have yet to fully approve the deal. Shares gave up 2.6% to £76.10.
As well as a strong civil aerospace after-market the firm saw record orders in its defence business, and power systems saw a recovery in orders in the fourth quarter. Shares climbed 6.8% to 635p.
Trading platform Plus500 (PLUS) gained 2.2% to 891p after it revealed that it had seen a 'significant increase in levels of customer trading activity' in recent weeks, meaning its first quarter financial performance was 'trending substantially ahead of the last quarter of 2019.'
The company cautioned that it was too early to quantify the impact of the first quarter on its full year results, given that elevated volatility in markets might not continue, and it was still weighing the potential impact of regulatory changes in Australia.
Shares in airlines group International Consolidated Airlines (IAG) slumped 8% to 475p after it reported a 5.7% drop in operating profit to €3.285 billion euros last year, slightly above its previous forecast, but warned that weak demand due to the coronavirus outbreak would lead to further flight cancellations on its Asian and European routes this quarter.
Outgoing chief executive Willie Walsh, who hands over the controls next month to Luis Gallego, current head of IAG's Iberia subsidiary, attempted to reassure investors that the group was 'resilient with a strong balance sheet and substantial cash liquidity to withstand the current weakness.
'We have a management team experienced in similar situations and have demonstrated that we can respond quickly to changing market conditions. We are strongly positioned for the expected recovery in demand,' added Walsh.
Budget airline easyJet (EZJ) admitted that it had seen 'a significant softening of demand and load factors into and out of our Northern Italian bases' due to the coronavirus outbreak as well as 'slower demand across our other European markets.'
The company said it was too early to forecast the impact of the virus on its full year results but that it would continue to reduce costs, including postponing 'non-critical project and capital expenditure' in order to protect earnings as best it could. Shares dipped 4% to £10.52.
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