Asian and European markets mostly dropped Wednesday after suffering a diabolical first quarter, with traders contemplating the prospect of lengthy lockdowns as the coronavirus continues its deadly sweep across the planet.

With the number of infected and dead still surging in Europe and the United States, hopes are fading that strict containment measures keeping billions of people at home will be lifted any time soon.

That, in turn, is stoking uncertainty about the outlook for the global economy -- which is widely expected to slip into recession this year -- while there are also concerns about how long any recovery will take.

US President Donald Trump said he was extending social distancing and stay-at-home orders for another 30 days to the end of the month, while members of his virus task force warned almost a quarter of a million Americans could die from the disease.

"The demand shock for oil and for the global economy more broadly will be more significant if mobility and social interaction restrictions stay in place beyond April," said AxiCorp's Stephen Innes.

"The real question for investors isn't how shockingly bad the first quarter is going to be -- sadly that's a given -- it's how long the weakness will persist and, as a consequence, how much permanent damage will be done."

He added that "while the full effects of these disruptions are not yet evident, it is clear that the economy is experiencing the most abrupt and severe contraction since the Great Depression".

And Rodrigo Catril, of National Australia Bank, said in a note: "Overall, there seems to be an increasing risk that markets are underestimating the length containment measures will be implemented across the globe. China and now Italy are also showing that the removal of these containment measures will be slow."

There has been a little good news, with fresh data Wednesday showing another surprise return to growth in China's factory sector. The Caixin purchasing managers index last month came in slightly above the 50 mark that separates growth from contraction, having hit a record low in February.

The figure came a day after an official reading that also came in well above forecasts, providing hope the world's number two economy is slowly grinding back to work after a long lockdown.

- Saudis 'digging in' -

But Asian markets, after a broadly upbeat start to the day, ended in negative territory, with Tokyo plunging 4.5 percent and Singapore more than two percent. Mumbai and Seoul sank more than three percent, while Shanghai, Taipei and Jakarta were also lower.

Hong Kong lost more than two percent, with market heavyweight HSBC plunging more than nine percent and Standard Chartered bank more than seven percent after they scrapped dividends and warned of a severe impact to revenues.

Sydney, however, enjoyed another strong day, rallying 3.6 percent.

London, Paris and Frankfurt all tumbled.

While there remains a lot of uncertainty on markets, and further turmoil is forecast, the past week had seen some stability return to trading floors, thanks to the massive stimulus pledges.

"The recent stabilisation in prices had been touted in some quarters as evidence that perhaps the worst of the declines of the last quarter may well be behind us," said CMC Markets analyst Michael Hewson.

"In reality the recent rebound was probably due to month and quarter end rebalancing of portfolios."

Oil slipped, as Saudi Arabia began ramping up output as it presses on with a price war with Russia. However, there was some support after Trump said the two would hold talks, as he frets over the hit to US energy firms from the plunge in the crude market.

"They're going to get together and we're all going to get together and we're going to see what we can do," Trump said. "Because you don't want to lose an industry. You're going to lose an industry over it."

However, Innes added that the Saudi decision to boost output "is yet another signal that Saudi is digging in. The risk remains skewed to the downside for oil until this changes, and/or COVID-19 news flow turns positive".

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: DOWN 4.5 percent at 18,065.41 (close)

Hong Kong - Hang Seng: DOWN 2.2 percent at 23,085.79 (close)

Shanghai - Composite: DOWN 0.6 percent at 2,734.52 (close)

London - FTSE 100: FTSE 100: DOWN 4.0 percent at 5,444.73

Brent North Sea crude: DOWN 0.1 percent at $22.74 per barrel

West Texas Intermediate: DOWN 0.6 percent at $20.36 per barrel

Euro/dollar: DOWN at $1.0973 from $1.1037 at 2130 GMT

Dollar/yen: DOWN at 107.50 yen from 107.63 yen

Pound/dollar: DOWN at $1.2358 from $1.2420

Euro/pound: DOWN at 88.80 pence from 88.82 pence

New York - Dow: DOWN 1.8 percent at 21,917.16 (close)

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