* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* MSCI All-Country World Index down 0.7%
* European shares open lower
* U.S. 10-year Treasury hits record low
* Dollar dips vs. yen, Swiss franc
By Ritvik Carvalho
LONDON, March 6 (Reuters) - Global stock markets tumbled on
Friday as disruptions to business from the spreading coronavirus
epidemic worsened, stoking fears of a prolonged economic
slowdown.
European shares opened sharply lower, with travel stocks
bearing the brunt. The pan-European STOXX 600 index was down
2.4% by 0856 GMT. .EU
Germany's DAX .GDAXI slid 2.4%, Britain's FTSE 100 .FTSE
fell 1.8% and France's CAC 40 .FCHI fell 2.4%.
The MSCI All-Country World Index .MIWD00000PUS , which
tracks shares across 47 countries, was down 0.72%.
After marking their worst weekly performance since the 2008
financial crisis, global stocks as measured by the index are up
1.7% this week, as sentiment recovered on the back of stimulus
from policymakers to combat the economic fallout of the virus.
The U.S. Federal Reserve made an emergency interest rate cut
of 50 basis points earlier this week. The Bank of Canada and the
Reserve Bank of Australia also cut rates, with investors
expecting other major central banks to soon follow suit.
Officials and companies in Britain, France, Italy and the
United States are struggling to deal with a steady rise in virus
infections that have in some cases triggered corporate defaults,
office evacuations, and panic buying of daily necessities.
The outbreak spread across the United States on Thursday,
surfacing in at least four new states. "The interplay of virus containment fears and stimulus
measures means that in the near term we expect market volatility
to persist," said Mark Haefele, chief investment officer at UBS
Global Wealth Management.
Yields on U.S. Treasuries fell to a record low and Treasury
futures jumped as investors increased bets that the Fed will
follow this week's surprise rate cut with further easing.
The yield on benchmark 10-year Treasury notes US10YT=RR
fell to a record low of 0.7650% on Friday.
Minneapolis Federal Reserve President Neel Kashkari said
late on Thursday the Fed could cut rates further if needed.
Money markets are pricing in another 25 basis-point-cut from
the current 1% to 1.25% range at the next Fed meeting on March
18-19 and a 50-basis-point cut by April.
Rapidly falling yields hammered the dollar, which fell to a
six-month low versus the yen and close to a two-year trough
against the Swiss franc. FRX/
Germany's benchmark 10-year Bund yield fell to a six-month
low within striking distance of last year's record lows.
GVD/EUR
The flu-like virus emerged late last year in the central
Chinese city of Wuhan and has since spread to more than 80
countries. It has claimed more than 3,000 lives, and though new
infections have slowed in China there are concerns other
countries are not prepared.
Travel restrictions and factory closings aimed at curbing
the spread of the virus are expected to pressure global growth.
Many investors were awaiting the release of U.S. non-farm
payrolls later on Friday. Recent U.S. economic data has been
encouraging, but concerns about the epidemic are likely to
overshadow any signs of a strong labour market.
Earlier in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS fell 2.1%, while Japan's
Nikkei stock index .N225 sank 2.94%. Australian shares .AXJO
were down 2.44%.
Shares in China CSI300. fell 1.22%, while stocks in Hong
Kong .HIS , another city hard hit by the virus, fell 2.12%.
Against the Japanese yen JPY= , the dollar fell to a
six-month low and was last at 105.77 yen. The greenback also
sank to a two-year trough of 0.9410 Swiss franc CHF=EBS .
Sterling GBP=D3 traded near a one-week high versus the
dollar.
The euro EUR=EBS gained 0.3% to trade $1.1271. Markets in
the euro zone are pricing in a 93% chance that the European
Central Bank will cut its deposit rate, now minus 0.50%, by 10
basis points next week.
The single currency has now reversed all its earlier losses
for the year, rising from below $1.08 a few weeks ago to above
$1.12.
ING analysts said they were targeting $1.15 in the coming
weeks as aggressive U.S. rate cuts contrasted with the limited
room for action at the European Central Bank.
"For now, expect USD weakness vs G10 FX to continue, and the
G10 FX segment outperforming EM FX, with carry trades under
pressure," they said in a research note.
Oil prices also fell due to worries that non-OPEC oil
producers might not agree to output cuts even though global
energy demand is weakening.
U.S. crude CLc1 fell 1.63% to $45.15 a barrel, while Brent
LCOc1 fell 1.8% to $49.10, with worries about a decline in
global demand due to the virus outbreak and uncertainty about
production cuts hurting prices. O/R