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GLOBAL MARKETS-Stocks tumble, oil falls, gold spikes as virus fears grip markets

Published 24/02/2020, 23:18
© Reuters.  GLOBAL MARKETS-Stocks tumble, oil falls, gold spikes as virus fears grip markets
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* Nikkei futures tumble, Dow sheds more than 3.5%

* U.S. 30-year Treasury yields set record low

* Gold prices touch highest level since 2013

(Updates to U.S. stock market close)

By Rodrigo Campos

NEW YORK, Feb 24 (Reuters) - Stocks across the globe fell by

the most since mid-2016 on Monday and oil prices tumbled as a

jump in coronavirus cases outside of China drove investors to

the perceived safety of gold and government bonds on fears of

the impact on the global economy.

Spot gold prices rose for a fifth straight session and

touched a 7-year high while the U.S. 30-year Treasury bond yield

set a record low. MSCI's global gauge of stocks fell 3% and the

three major U.S. indexes also fell more than 3%.

Despite the spike in coronavirus cases reported in Italy,

South Korea and Iran, the head of the World Health Organization

said that "using the word 'pandemic' now does not fit the facts

but may certainly cause fear.

"We must focus on containment while preparing for a

potential pandemic," Tedros Adhanom Ghebreyesus told reporters

in Geneva, adding that the world was not witnessing an

uncontained spread or large-scale deaths. Concerns over the hit to economic growth and uncertainty

over the stress to supply chains triggered selling in stocks and

other high-risk assets.

"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 New York.

"What the market is trying to predict here is 'How large

will this get globally, and when will it start to peak?'"

The Dow Jones Industrial Average .DJI fell 1,031.61

points, or 3.56%, to 27,960.8, the S&P 500 .SPX lost 111.86

points, or 3.35%, to 3,225.89 and the Nasdaq Composite .IXIC

dropped 355.31 points, or 3.71%, to 9,221.28.

The pan-European FTSEurofirst 300 index .FTEU3 lost 3.76%

with Milan's stock market down more than 5% after a spike in

cases of the virus left six dead in Italy and parts of the

country's industrial north in virtual lockdown. .EU

MSCI's gauge of stocks across the globe .MIWD00000PUS shed

2.97%, its biggest single-day decline since June 24, 2016.

Emerging market stocks lost 2.67%. MSCI's broadest index of

Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 2.52%

lower, while futures in Japan's Nikkei NKc1 fell over 4%.

The virus has now killed more than 2,500 people in China,

which has reported some 77,000 cases, and spread to 29 other

countries and territories, with a death toll of more than two

dozen outside of China, according to a Reuters tally.

Iran, which announced its first infections last week, said

it had confirmed 61 cases and 12 deaths, with most cases in the

holy city of Qom. Kuwait, Bahrain, Oman, Afghanistan and Iraq

reported their first new coronavirus cases, all in people who

had been to Iran. "The idea that the coronavirus has been fully contained has

been firmly banished," said Chris Beauchamp, chief market

analyst at IG. "This means the economic forecasts of the impact,

such as they are, will need to be revised, with a greater impact

now to be expected."

SURGE TO SAFETY

Benchmark 10-year notes US10YT=RR last rose 29/32 in price

to yield 1.3738%, from 1.47% late on Friday. The 30-year bond

US30YT=RR touched a record low yield of 1.811.

In currency markets the Japanese yen strengthened 0.77% to

110.74 per dollar. The dollar index =USD fell 0.13%, with the

euro EUR= up 0.08% to $1.0852.

"Ultimately this is all a risk-off trade," said Marvin Loh,

senior global markets strategist at State Street Global Markets.

"When you look at the yen, when you look at the Swissie,

when you look at rates, it is risk-off. It's probably

reflective, to a certain degree, of the market being a little

too sanguine up until now ... so there's an adjustment process

around it."

Korea's won KRW= was down 1% and emerging-market

currencies, from Mexico's peso MXN= and Turkey's lira TRY=

to Poland's zloty PLN= and Russia's ruble RUB= , were all in

the red.

Oil pared some of its early losses. U.S. crude CLc1 fell

3.8% to $51.35 per barrel and Brent LCOc1 was last at $56.18,

down 3.97% on the day. Both had fallen more than 5% during

Monday's session.

Among the main industrial metals, copper CMCU3 lost 1.33

percent to $5,688.50 a tonne. MET/L

"As the virus spreads globally, additional downside

revisions in oil demand for this year may be required," Jim

Ritterbusch, president of Ritterbusch and Associates, said in a

note.

"The accelerated sell-off in the stock market has become

difficult for the oil market to ignore," he said.

Yields on top-rated, tax-exempt U.S. municipal bonds fell to

all-time lows of 1.01% in 10-year paper and 1.6% in 30-year

debt, according to Municipal Market Data.

Asia stock markets https://tmsnrt.rs/2zpUAr4

Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA

World FX rates in 2020 http://tmsnrt.rs/2egbfVh

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