The world prepared for a coronavirus pandemic on Friday as hopes the disease could be contained to China vanished and investors dumped equities in expectation of a global recession.

The U.S. stock market fell into correction territory with the benchmark S&P 500 index down more than 4% on Thursday, extending a market rout that has now sliced more than 10% off of its closing peak on Feb. 19. Asian stocks on Friday tracked Wall Street’s plunge.

“The coronavirus now looks like a pandemic. Markets can cope even if there is big risk as long as we can see the end of the tunnel,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“But at the moment, no one can tell how long this will last and how severe it will get.”

Mainland China – where the virus originated late last year – reported 327 new cases on Friday, the lowest since Jan. 23, taking its total cases to more than 78,800 with almost 2,800 deaths.

But with countries other than China now accounting for about three quarters of new infections, World Health Organization (WHO) Director General Tedros Adhanom Ghebreyesus said all nations should prepare.

“This virus has pandemic potential,” Tedros said in Geneva on Thursday. “This is not a time for fear. This is a time for taking action to prevent infection and save lives now.”

A Reuters tally showed about 12 countries had reported their first virus cases in past 24 hours, including the first case in sub-Saharan Africa – that of an Italian man in Nigeria – as well as New Zealand and Lithuania.

Outside China the virus has spread to another 46 countries, where about 3,700 cases and 57 deaths have been reported, according to the WHO.

Ratings agency Moody’s said a coronavirus pandemic would trigger global and U.S. recessions in the first half of the year.

In addition to stockpiling medical supplies, governments ordered schools shut and canceled big gatherings, including sports events, to try to halt the spread of the flu-like disease known as COVID-19.

U.S. President Donald Trump’s administration was considering invoking special powers to rapidly expand U.S. production of protective gear, two officials told Reuters.

The U.S. Food and Drug Administration announced the first coronavirus-related drug shortage in the United States but declined to name the drug in question.

In Europe, France’s number of reported cases doubled, Germany warned of an impending epidemic and Greece, a gateway for refugees from the Middle East, announced tighter border controls.

“We have a crisis before us. An epidemic is on its way,” French President Emmanuel Macron said.

The death toll in Italy, Europe’s worst-hit country, rose to 17 on Thursday and the number of people who tested positive for the illness increased by more than 200 to 650. Germany has about 45 cases, France around 38 and Spain 23, according to a Reuters count.Employees work on a medical supply production line at a factory in Huaian, Jiangsu province, China February 28, 2020. China Daily via REUTERS

Tedros told reporters in Geneva that Iran, Italy and South Korea were at a “decisive point” in their efforts to prevent a wider outbreak.

South Korea has the most cases outside China, and reported 256 new infections on Friday, bringing the total number of infected in the country to 2,022.

The WHO’s Ryan said Iran’s outbreak may be worse than realized. It has suffered the highest death toll outside China, with 26 dead from 245 reported cases.

U.S. intelligence agencies are monitoring the spread of coronavirus in Iran as well as India, where only a handful of cases of have been reported, sources familiar with the matter said.

Source:- Reuters