Expect panic selling in the market over next 4 to 6 weeks, says Christopher Wood of Jefferies

"To me, right now, the big risk for markets is if the virus shows up in due course in North America and that is what the market has begun to worry about yesterday."

"My base case remains that when the weather changes and we get out of the traditional flu season, the virus will burn out but clearly we have a potential for more panic selling on a 4 to 6 week view depending on the news flow. However the big thing that hasn't really happened yet, and that could happen is the spread of the virus into North America."

He said: "On relative basis I am overweight India. Obviously one relative benefit for India out of what is going on in recent weeks is oil has declined sharply and the big decline in oil is almost wholly attributable to expectations of weaker demand on the back of the virus."

"So, I am happy to be relatively overweight India for now. The other positive at least up till present is that you still have domestic mutual fund flows in India. However the big negative on Indian remains what has been very weak growth and the relative strength of the Sensex is just concentrated in a few top quality stocks. So for India to become an interesting absolute return market, you need evidence of a capex cycle and that evidence remains missing in action."

"From a financial market standpoint, what I have been saying since this virus came out to equity investors is that the best way to hedge this risk was to go long Euro-Dollar futures, that is to bet on the Federal Reserve having to start cutting rates again rather than sell equities in the midst of panic selling."

"If you go long on Euro-Dollar futures as a hedge the moment the news flow hit, that hedge would have worked and I still think that that is the correct hedge to have in place," Wood added.