GLOBAL MARKETS-Apple virus warning shakes stocks, euro near three-year low

* Apple will miss quarterly revenue target due to

coronavirus

* European stocks fall 0.5-1%, S&P500 futures down 0.4%

* Euro near three-year low after bleak German ZEW survey

* Australian dollar falls; gold, benchmark bonds gain

* Oil skids more than 2%

* HSBC tumbles 6% after profit miss, to slash 35,000 jobs

By Marc Jones

LONDON, Feb 18 (Reuters) - World stocks markets were knocked

off record highs on Tuesday as two of the world's mega companies

and Europe's largest economy, Germany, reported damage from the

coronavirus outbreak.

Apple's stock fell almost 6% in Frankfurt at one stage and

Wall Street looked set for a rocky ride later after the iPhone

maker warned it was unlikely to meet the March quarter sales

guidance that it had set just three weeks ago. All of Europe's main markets were down between 0.5% and

1% .EU . China sensitive stocks led the falls but the mood had

been darkened further by a far-worse-than-feared German investor

sentiment survey pointing to a deepening manufacturing recession

there.

HSBC announced a massive restructuring that involved

shedding $100 billion of assets and slashing 35,000 jobs over

three years. It also warned about the impact of the coronavirus

on its Asia business. The stock fell more than 6% in London

trade. "We have been pointing out that the market reaction in past

weeks was excessively constructive and this could be a wake-up

call to all investors that ignored so far potential negative

impact," analysts at UniCredit said.

The warning from Apple sobered investors who had hoped

stimulus from China and other countries would protect the global

economy from the effects of the epidemic.

China's CSI300 bluechip stocks index .CSI300 had given up

0.5% after gaining sharply on Monday, encouraged by a central

bank rate cut and government stimulus hopes.

.T .SS

HSBC ensured Hong Kong Hang Seng .HSI lost 1.5%, while the

global tech reaction to Apple's warning left Tokyo's Nikkei

.N225 down 1.4% and South Korea down 1.5% as Samsung slid and

the Seoul government declared an economic emergency.

With safety in demand again, benchmark government bonds

rallied. The 10-year U.S. Treasuries yield fell 5 basis point to

just above 1.5% US10YT=RR and yields on German Bunds hit their

most negative depths in two weeks. Commodity markets, which are worried about the virus' impact

on power hungry China and other major Asian markets, saw Brent

oil prices tumble over 2% after five days of gains as gold

jumped the other way to a two-week high. XAU= O/R GOL/

The safe-haven Japanese yen rose 0.15% to 109.70 yen per

dollar JPY= too while the risk- and China-sensitive Australian

dollar lost 0.4% to $0.6686 AUD=D4 .

The yuan was steadier, trading at 6.9950 per dollar

CNY=CFXS but the euro certainly was not and looked to be

heading to $1.08 EUR= after Germany's gloomy ZEW survey had

bashed it down for a 10th day in the last 12. EUR= /FRX

"I sense that people are increasingly worried about the real

world impact on the export machine that is Germany," said

Allianz Global Investors strategist Neil Dwane.

TEMPTED TO SELL

Also hurting market sentiment were a reports that U.S.

President Donald Trump's administration was considering changing

regulations to allow it to block shipments of chips to China's

Huawei HWT.UL from companies such as Taiwan Semiconductor

Manufacturing Co, the world's largest contract chipmaker.

S&P 500 e-mini futures ESc1 were down 0.5% and Nasdaq

futures NQcv1 fell 0.6%, but TSMC 2330.TW had lost 2.9%

overnight.

The number of new cases of the virus in mainland China fell

below 2,000 for the first time since January, but it remains far

from contained. The death toll in China had climbed to 1,868,

the National Health Commission said, and the World Health

Organization said "every scenario is still on the table" in

terms of the epidemic's evolution. As China's authorities try to prevent the spread of the

disease, the economy is paying a heavy price. Some cities remain

locked down, streets are deserted, and travel bans and

quarantine orders are preventing migrant workers from getting

back to their jobs.

Many factories have yet to re-open, disrupting supply chains

in China and beyond, as highlighted by Apple.

"Apple is saying its recovery could be delayed, which could

mean the impact of the virus may go beyond the current quarter,"

said Norihiro Fujito, chief investment strategist at Mitsubishi

UFJ Morgan Stanley Securities.

"If Apple shares were traded cheaply, that might not matter

much. But when they are trading at a record high, investors will

be surely tempted to sell."

Euro trashed! https://tmsnrt.rs/31XAVLU

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