Equity markets collapsed on Monday as the rapidly spreading coronavirus fanned fears over the global economy, while a crash in oil prices added to the panic with energy firms taking a hammering.
SYDNEY - Global share markets tumbled on Monday as panicked investors fled to bonds to hedge the economic shock of the coronavirus, and oil plunged more than 20 percent after Saudi Arabia slashed its official selling price.
Investors drove 30-year US bond yields beneath 1 percent as they wagered the Federal Reserve would be forced to cut interest rates by at least 75 basis points at its March 18 meeting, despite only just having delivered an emergency easing.
The safe-haven yen surged across the board as emerging market currencies with exposure to oil, including the Russian rouble and Mexican peso, tumbled.
Saudi Arabia had stunned markets with plans to raise its production significantly after the collapse of OPEC's supply cut agreement with Russia, a grab for market share reminiscent of a drive in 2014 that sent prices down by about two thirds.
Brent crude futures slid $11.14 to $34.13 a barrel in chaotic trade, while US crude shed $10.58 to $30.70.
"Today's price action puts at risk the fiscal health of the vast majority of sovereign producers and budget cuts and increased debt loads are now looming in the event of a prolonged period of low prices," warned Helima Croft, head of global commodity strategy at RBC Capital Markets.
"For the most politically and economically fragile producer states, the reckoning could be severe."
There were also worries that US oil producers that had issued a lot of debt would be made uneconomic by the price drop.