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Canadian stocks and markets around the world fell sharply Wednesday as the economic and physical toll caused by the coronavirus outbreak mounted, marking an ominous start to the second quarter.

The S&P/TSX Composite Index fell about 22 per cent in the first quarter, its biggest decline since 2008, but had showed some signs of steadying in recent days.

On Wednesday, the index closed down 3.8 per cent at 12,876.37, in a broad-based selloff that left only the gold sector with gains, as investors fled to the perceived safety of assets such as bullion, bonds and the U.S. dollar. Canadian banks were down about 5 per cent, with shares of security software company BlackBerry Ltd falling nearly 18 per cent after dismal quarterly results.

The S&P 500 lost 4.4 per cent for the day, and similar losses were seen across the globe including in Japan and Europe. The catalyst for the global selloff was President Donald Trump’s warning to Americans late Tuesday of a “painful” two weeks ahead.

The White House said anywhere from 100,000 to 240,000 Americans could die from COVID-19, even if the country follows guidelines to avoid shopping trips, eating at restaurants and other activities through April. Florida’s governor became the latest to issue a statewide stay-at-home order.

Such restrictions have already deeply gashed the economy, and Whiting Petroleum, one of the biggest drillers in the Bakken shale formation, filed for Chapter 11 bankruptcy protection Wednesday, with the price of oil near $20 a barrel. Automakers also reported sharp drops in U.S. sales for March, including a 43% plunge for Hyundai. Mortgage applications tumbled 24% from year-ago levels as open houses are all but shut down.

“There is a lot of uncertainty,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “The negative news is really taking over.”

Roughly two weeks before the U.S. first-quarter earnings season is due to start in earnest, investors are “very sensitive to the latest headlines” about the virus due to a lack of fundamental information,” said John Augustine, chief investment officer at Huntington National Bank in Columbus, Ohio.

“We don’t know all the economic and earnings impact yet and this is a sober thought for Americans with those projections of the death rate,” said Augustine.

S&P 500 firms are expected to enter an earnings recession in 2020, falling 4.3% in the first quarter and 10.9% in the second, according to the latest estimates gathered by Refinitiv.

Economic data in North America did little to lift the mood. While U.S. manufacturing activity contracted less than expected in March, new orders received to factories fell to an 11-year low. And business closures pushed private payrolls down by 27,000 jobs last month, the first decline since September 2017, according to the ADP National Employment Report.

On this side of the border, the IHS Markit Canada Manufacturing Purchasing Managers’ index (PMI) fell to a seasonally adjusted 46.1 in March, the lowest in at least nine years. It indicated a contraction in factory activity.

But money managers mostly focused on Trump’s comments and those of New York Governor Andrew Cuomo, a state badly hit by the virus.

“With comments from President Trump and Cuomo suggesting this is going to get worse before it gets better, investors are coming to the realization the virus will be with us for longer than they would have expected,” said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, NC.

“Because of that the bear market is going to last longer,” he said. “The longer people stay home the longer it takes for the economy to restart and the longer it takes for corporate earnings to come back.”

DoubleLine Capital Chief Executive Jeffrey Gundlach - one of the most followed names in the world of bond markets - said Tuesday he believes the coronavirus sell-off is not over yet and that the lows stocks hit in March will be surpassed in April due to uncertainty over the outbreak. “I think we are going to get something that resembles that panicky feeling again during the month of April,” he said in a webcast.

Oil prices fell on Wednesday after U.S. crude inventories rose last week by the most since 2016, while gasoline demand suffered its biggest weekly drop ever due to the coronavirus pandemic.

Crude inventories rose by 13.8 million barrels last week, the U.S. Energy Information Administration said. That was the biggest one-week rise since 2016, and analysts expect similar data in coming weeks, as refineries curb output further and gasoline demand continues to decline.

West Texas Intermediate (WTI) crude fell 17 cents to settle at $20.31 a barrel, after hitting a low at $19.90.

June Brent crude fell $1.61 , or 6.1%, to $24.74 a barrel. The global benchmark fell to $21.65 on Monday, its lowest since 2002, when the now-expired May contract was the front month.

The market has slumped on the sharp fall in demand because of the coronavirus pandemic and rising output from Saudi Arabia and Russia after a supply pact collapsed last month. Brent crude fell 66% in the first three months of 2020, its biggest ever quarterly loss. Saudi Arabia’s production rose to more than 12 million bpd in the most recent months, according to sources.

Reuters, The Associated Press and Globe staff