Global stock markets dive as coronavirus spreads

Traders work through the closing minutes of trading Tuesday on the New York Stock Exchange floor

Traders work through the closing minutes of trading Tuesday on the New York Stock Exchange floor

In Asia, South Korea's KOSPI slumped 3.9% after the government declared a high alert.

Australia's benchmark index slid 2.25% and New Zealand fell about 1.8%. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic. But a continued decline in 2-year yields suggested a different trading dynamic, Simons said, and seemed to show traders looking for some type of action by the USA central bank.

The dollar index fell 0.096%, with the euro up 0.03% at $1.0846.

Singapore's Straits Times Index was trading down 23.18 points or 0.7 per cent to 3,157.85 at 9:52am.

In currency markets the Japanese yen strengthened 0.78% to 110.73 per dollar. "I won't say [it's] airtight, but it's pretty close to airtight", he said.

"The news flow from the weekend has changed the game somewhat, where the focus is much more on the threat of an outbreak outside of China".

Dozens of countries have accelerated emergency measures to curb the spread of the coronavirus, which has killed close to 2,700 in China - although the World Health Organization says the outbreak there has been declining since February 2.

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It has spread to some 28 other countries and territories, with a death toll of around two dozen, according to a Reuters tally.

While markets had largely brushed aside fears of long-term economic damage from the virus, a steady drip of new cases in countries beyond China has kept concerns alive.

The 10-year Treasury yield has fallen more than 20 basis points over the past five days. The bets picked up steam after purchasing managers' index (PMI) surveys on Friday showed USA business activity in both the manufacturing and services sectors stalled in February, the latter slipping to its lowest since 2013.

That left the dollar index slightly higher at 99.430.

"It is not as though the numbers have changed dramatically; but what has changed is the geography, which adds a new level of concern", said Art Hogan, chief market strategist at National Securities in NY. The moves came as investors dumped shares and fled for the safety of bonds, perceiving a risk that China's coronavirus outbreak will grow into a pandemic, with disruptive and deadly consequences around the world, as the number of infections rose sharply in South Korea, Italy and Iran.

Brent crude slumped 2.8 per cent, or US$1.63, to US$56.87 a barrel while USA crude dropped 2.6 per cent, or US$1.4, to US$51.97 a barrel.

USA gold futures climbed 1.2 per cent at US$1,668.6 an ounce. SHV seeks to track the investment results of the ICE U.S. Treasury Short Bond Index, which measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of equal to or greater than one month and less than one year.

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