• The FTSE 100 gave up 0.6pc and the FTSE 250 slid 0.3pc, as a modest rebound that the indexes had managed over the last two sessions unravelled.
• The FTSE 100 has shed more than 3pc since last week when news of the coronavirus flare-up first emerged.
• Weaker crude prices also weighed on shares of Shell and peer BP, as oil stocks made up for more than half of the blue-chip bourse's losses.

The FTSE 100 gave up 0.6pc and the FTSE 250 slid 0.3pc, as a modest rebound that the indexes had managed over the last two sessions unravelled.

Countries have begun isolating hundreds of citizens evacuated from the Chinese city of Wuhan to stop the virus from spreading, and the World Health Organization may on Thursday reassess its stance on the outbreak.

"Fears of a pandemic may be over-egging the pudding, but there is again a clear risk-off mood in the market," Markets.com analyst Neil Wilson said.

The FTSE 100 has shed more than 3pc since last week when news of the coronavirus flare-up first emerged, and the midcaps have lost more than 2pc over the same period.

"Expect to see further declines and more volatility in risk assets in the coming days. Investors who were waiting for the dips to buy may need to wait a little longer," FXTM analyst Han Tan said.

Shell slid 4pc to its lowest since July 2017 after its fourth-quarter profit halved and the oil major cut the pace of its $25 billion share buyback programme.

Weaker crude prices also weighed on shares of Shell and peer BP, as oil stocks made up for more than half of the blue-chip bourse's losses.

Telecom firm BT shed 4.2pc after reporting a worse-than-expected drop in quarterly revenue and said Britain's decision to limit Huawei's role in building 5G and fibre networks would rapidly increase costs.

After the US Federal Reserve kept interest rates unchanged, as expected, dealers now look ahead to a Bank of England policy meeting. Britain's central bank may cut interest rates, just a day before Britain officially leaves the European Union.

"If the Wuhan virus emergency stretches into months and starts to impact economic growth severely, we can be sure that the central bank monetary spigots will be fully opened," OANDA analyst Jeffrey Halley said.

Outperforming the main index was Unilever, which added 1.4pc after the consumer goods giant launched a strategic review of its tea business.

Midcap Avast dropped 4.7pc, bringing weekly losses to about 20pc, after saying it would shutter its data analytics business following reports of data privacy concerns.