Stocks resumed their plunge, wiping out more than $3 trillion in value this week alone, and US Treasuries yields hit record lows on Thursday as the coronavirus spread faster outside China and investors fled to safe havens.
The number of new coronavirus infections in China - the source of the outbreak - was for the first time overtaken by fresh cases elsewhere on Wednesday, raising pandemic fears.
The pan-European STOXX 600 index opened 2.3 percent lower and Italy's blue-chip index sank. Dozens of European companies have warned about potential damage to their profits.
In the United States, Microsoft became the second trillion-dollar company to warn about its results after Apple. X.Its Frankfurt-listed shares were down 4 per cent.
Global equities have now fallen for six straight days. Wall Street's so-called fear gauge was near its late 2018 highs.
Spot gold rose 0.5 percent to $1,649 per ounce and silver gained 1 percent to $18.03 an ounce. Gold prices hit a seven-year high at near $1,688 per ounce on Monday.
"Safe-haven currencies are doing very well and gold is heading back higher, and unless we see a slowdown in the coronavirus cases outside China, risk sentiment will continue to be undermined," said Peter Kinsella, global head of FX strategy at UBP in London
Meanwhile, the yield on U.S. Treasuries, which falls when prices rise, dropped below 1.3 per cent US10YT=RR and the yield curve continued to send recession warnings.
Markets are pricing a roughly even chance of the Federal Reserve will cut interest rates next month and have almost fully priced in a cut by April.
Yields on benchmark German 10-year maturities fell to -0.5140 percent. Italian debt underperformed as Europe's worst flare-up of the virus in that country raised fears of a recession there.
E-mini futures for the S&P 500 were down 0.3 percent ESc1 and oil, sensitive to global growth, fell more than 1 per cent to its cheapest in over a year.