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Asia suffered its biggest drop in eight sessions overnight and though Europe’s STOXX 600 recovered from an early 1% fall it remained unsteady, while Wall Street was expected to open 0.5% in the red

World stocks spluttered to their lowest level in more than a week on Thursday, as a surge in US coronavirus cases and an IMF warning of an almost 5% plunge in the global economy this year hit the bulls again.

Asia suffered its biggest drop in eight sessions overnight and though Europe’s STOXX 600 recovered from an early 1% fall it remained unsteady, while Wall Street was expected to open 0.5% in the red.

After a white-hot few months for markets that has seen world stocks rebound nearly 40%, nervousness about the impact of COVID-19 was rising again.

In the United States, Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday and Australia posted its biggest daily rise in two months.

The governors of New York, New Jersey and Connecticut ordered travellers from eight other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions.

Disney has delayed the re-opening of theme parks and resorts in California, and Texas is facing a “massive outbreak” and considering new localised restrictions, its governor said.

“During the swift rebound since the March lows, equity markets may have gotten a little ahead of themselves,” wealth manager DWS said in a quarterly Chief Investment Officer report.

With the added pressure of looming half year portfolio reviews, investors were huddling in traditionally safer government bonds and gold.