World stock markets sustained heavy losses Thursday as investors worried about a possible second coronavirus wave in the US and the Federal Reserve warned of a "highly uncertain" economic outlook because of the killer disease.
On Wall Street the Dow was down by more than 1,100 points in the late New York morning.
"Stock market gains are slowly getting wiped out as the second coronavirus wave hits the US," said Edward Moya, an analyst with OANDA.
Key eurozone markets were 4.5 percent or more down at the closing bell, with London faring only marginally better.
That followed sell-offs across Asia earlier after the US central bank's Federal Open Market Committee (FOMC) warned that the world's top economy would take time to fully recover from the worst global emergency in generations.
In a statement it said the crisis "poses considerable risk to the economic outlook over the medium term", forecasting a 6.5-percent contraction this year and unemployment of 9.3 percent.
- 'Hangover' -
"A combination of a post-FOMC hangover and reports of a substantial increase in virus case counts in Texas have left traders in a state of risk limbo," said Stephen Innes, a global strategist with AxiCorp.
California, Florida and Texas have reported new spikes in COVID-19 infections.
"Jumps in new daily cases... immediately sparked concerns of a potential second round of infection in the country, inevitably impacting market sentiment towards riskier assets," said ActivTrades analyst Pierre Veyret.
Stocks worldwide had been rallying for several weeks as lockdown measures were eased in key regions, and after governments and central banks pledged trillions of dollars in support to kickstart growth, sparking investor optimism.
"The market got too far ahead of itself," said Markets.com analyst Neil Wilson.
Meanwhile, another 1.54 million US workers filed for unemployment benefits last week, the Labor Department said Thursday, bringing the total since mid-March to 44.2 million.
The week's reading was roughly in line with forecasts.
Back in Europe, shares in German airline Lufthansa dived in Frankfurt after the company said it would axe 22,000 jobs.
Oil prices tumbled after data showed US supplies jumped 5.7 million barrels last week, reviving demand worries despite easing lockdowns.
- Key figures around 1540 GMT -
London - FTSE 100: DOWN 4.0 percent at 6,076.70 points (close)
Frankfurt - DAX 30: DOWN 4.5 percent at 11,970.29 (close)
Paris - CAC 40: DOWN 4.7 percent at 4,815.60 (close)
EURO STOXX 50: DOWN 4.5 percent at 3,144.57
New York - Dow: DOWN 4.2 percent at 25,853.99
Tokyo - Nikkei 225: DOWN 2.8 percent at 22,472.91 (close)
Hong Kong - Hang Seng: DOWN 2.3 percent at 24,480.15 (close)
Shanghai - Composite: DOWN 0.8 percent at 2,920.90 (close)
West Texas Intermediate: DOWN 8.6 percent at $36.32 per barrel
Brent North Sea crude: DOWN 7.2 percent at $38.73
Euro/dollar: UP at $1.1395 from $1.1374 at 2100 GMT
Dollar/yen: DOWN at 106.60 yen from 107.12 yen
Pound/dollar: DOWN at $1.2659 from $1.2747
Euro/pound: UP at 90.01 pence from 89.23 pence