THE coronavirus outbreak threatens to spark a global downturn as oil prices hit a one-year low and China's stock market plummet.

An ongoing lockdown in the country has seen demand for oil fall 20 percent on normal levels, while the Shanghai Composite Index fell almost eight percent on its first day of trading after the Lunar New Year.

The spread of the coronavirus, which was first contracted in mid-December in the eastern Chinese city of Wuhan, has accelerated in recent weeks.

The total number of cases globally now exceeds 17,300, while at least 362 people are confirmed to have died.

The outbreak has seen travel restrictions put in place across China and the New Year holiday extended by three days to try to halt the spread.

The measures have seen demand for oil drop by approximately three million barrels per day compared to levels usually seen at this time of year.

The fall is thought to be the biggest shock to demand seen by the oil market since the financial crisis of 2008 and 2009, the Straits Times reported.

China is the world's second biggest economy and its largest importer of oil, meaning the such dramatic changes in demand can have a significant impact on global markets.

Today's stock market fall was also the biggest in one day for four years, hitting manufacturing, materials, and consumer goods.

By contrast, shares in healthcare providers and insurers rose.

Speaking to CNBC, Byron Wien, vice chairman of Blackstone, one of the largest investment firms in the world, said the outbreak is set to hurt growth in China and around the world.

"Right now, people are very confused about what the outcome of the virus is going to be, what the industrial and market response is going to be," he said.

“We’re in a maximum level of uncertainty. Markets never respond well to that.”

“Global growth right now is projected to be greater than three percent.

"If this continues, and maybe even if it only continues for another month, you could knock that down below three.”

As part of an attempt to stimulate the economy and prevent a downward spiral, China's central bank, The People's Bank of China, has unexpectedly lowered interest rates.

It also injected 150 billion yuan ($22bn; £16.3bn) into the economy on Monday to ensure levels of liquidity in the banking system.

The coronavirus outbreak comes amid an ongoing trade war between China and the United States, sparked after President Trump began imposing tariffs and other trade barriers in a bid to counter his country's growing trade deficit.

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