Asian markets plunged Wednesday, reversing an early rally fuelled by global stimulus pledges, including a more than $1 trillion package flagged by the US.

With borders being shut and countries going into lockdown, there is a broad expectation the world economy will plunge into recession as markets convulse.

Dealers across the planet, who have been sent running for the hills, have been begging for government measures to mitigate the impact of the disease as trade collapses and businesses close.

On Tuesday, the US led the charge, with Treasury Secretary Steven Mnuchin saying officials were drawing up a package that could surpass $1 trillion, on top of $300 billion in deferred tax payments, making it among the largest federal emergency plans ever and far surpassing assistance during the 2008 global financial meltdown.

The measures would include cash payments to struggling families, with Mnuchin warning the pandemic could drive US unemployment to 20 per cent, a Republican Senate source told CNN.

“We don’t want people losing jobs and having no money to live,” Donald Trump said at a White House press conference, adding that the package “is a substantial number. We are going big.”

Also Tuesday, British finance chief Rishi Sunak unveiled an “unprecedented package” of government-backed loans worth £330 billion ($400 billion), while France and Spain announced tens of billions of euros in aid.

And with the global airline industry reeling, Italy moved to re-nationalise the bankrupt former national carrier Alitalia, and France signalled it would not hesitate to take key firms into state control to protect them.

The moves followed central bank interest rate cuts and pledges to make cash available to stop financial markets from jamming up.

However, Asia’s morning burst gave way to an afternoon tumble, with traders fretting about the future as economists predict the US will slip into a recession, with warnings of a six per cent contraction during the second quarter.

“While all of these numbers appear impressive on the surface, the uncertain nature of how the virus will play out in the coming weeks means that the final bill could well be much higher,” said CMC Markets analyst Michael Hewson.

Tokyo ended down 1.7 per cent, while Sydney plunged more than six per cent and Hong Kong lost more than four per cent, while Shanghai was 1.8 per cent off.

Seoul shed almost five per cent, Mumbai and Jakarta lost more than three per cent and Taipei retreated more than two per cent.

Singapore was 0.9 per cent lower but Wellington squeezed out gains.

US and European stocks rallied Tuesday but in early trade London, Paris and Frankfurt went into sharp retreat, while US futures also pointed to a rough day for Wall Street.

Before the market opened in Paris, French regulators banned short-selling for a month, extending an initial one-day halt, in an effort to curb steep losses.

“The missing fundamental ingredient for a sustainable recovery in risk appetite is some evidence that the growth of global Covid-19 infection rates is peaking,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors. “Clearly, we are not there yet.”

Crude oil also reversed early advances, flirting with 17-year lows as demand for the commodity falls off a cliff with Saudi Arabia and Russia engaged in a price war that has ramped up output.

AxiCorp’s Stephen Innes said the demand outlook remained “dismal”, adding: “Indeed, the scale of the economic impact of Covid-19 on the major world economies is unparalleled.”

In company news, shares in Fujifilm soared more than 15 per cent after China said a flu drug made by the Japanese firm could be effective in treating patients with the virus.