ASIAN and European stocks sank on Wednesday as the coronavirus infects the global economic outlook, while oil prices dived as Opec-led output cuts were deemed insufficient to soak up a vast supply glut.

Sentiment turned sour on Wednesday on grim warnings over the economic impact of the coronavirus.

Investors also fretted on news that US President Donald Trump had frozen US funding for the World Health Organisation (WHO) over its handling of the crisis.

Top stock markets across Europe each shed more than two per cent, as collapsing oil prices sent the energy sector tumbling.

The dollar meanwhile clawed back some ground versus rival currencies, having been slammed so far this week by recent US Federal Reserve virus stimulus cash.

Asian equities sank as investors fretted over the current uncertain climate, while energy companies there also took a hammering.

Shanghai finished down 0.6 per cent and Hong Kong was 1.2 per cent lower despite export data on Tuesday showing Chinese trade volumes had fallen less than feared.

Tokyo slid 0.5 per cent after a sharp rise in the last session, with a stronger yen weighing on investor sentiment.

Sydney ended 0.4 per cent lower and Singapore fell 0.3 per cent, but Seoul shot up 1.7 per cent as South Korea voted in national parliamentary elections.

London Capital Group analyst Jasper Lawler said: “The mood has darkened since the IMF’s [International Monetary Fund’s] doom-laden global recession prediction and Donald Trump’s decision to cut WHO funding.”

Wall Street stocks had jumped on Tuesday on signs that new Covid-19 cases had fallen in some of the country’s biggest hotspots including New York.

However, the Washington-based IMF forecast the global economy would shrink three per cent this year and the US economy, the world’s biggest, is set to contract by 5.9 per cent.

The IMF said it would be the worst global downturn since the Great Depression of the 1930s.

CMC Markets analyst Michael Hewson said: “Yesterday’s assessment by the IMF of the pandemic impact was an eye-watering assessment of the effect recent lockdowns are likely to have on global economic activity.”

The benchmark West Texas Intermediate oil contract hit $19.20 per barrel, the lowest level in 18 years.

Oil extended Tuesday’s 10 per cent slump, despite the weekend deal by producer nations to cut output by nearly 10 million barrels per day from next month.

Investors fear the agreement does not go far enough to offset the global lockdown’s hit to the transport sector while rapidly shrinking storage capacity around the world caused by the glut looms ever larger.

Trump hinted earlier this week that around 20 million barrels daily could eventually be removed from the market.