* Dollar slides vs yen, gains on commodity currencies
* Europe down 8%, Wall Street futures hit down limit
* ASX 200 plunges almost 10%, Nikkei drops 2%
* Oil down 9.5%
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Updates market moves throughout)
By Marc Jones and Lawrence White
LONDON, March 16 (Reuters) - Stock markets and oil prices
continued to nose-dive on Monday after the second emergency cut
in U.S. interest rates in as many weeks -- effectively to zero
-- and supportive measures from all corners failed to quell
coronavirus fears.
The drastic manoeuvres were aimed at cushioning the economic
impact as the breakneck spread of the coronavirus all but shut
down more countries, but they did little to calm panicky
investors worried about firms surviving a prolonged recession.
European stocks plunged close to 10% in brutal trading
conditions .EU that also sent volatility gauges .V2TX
surging to record highs and had Wall Street traders expecting
more major damage when U.S. markets reopen. .N
Futures had quickly hit their down limits overnight but the
SPDR S&P 500 exchange traded fund SPY.P was pointing down 10%,
while shares of Bank of America Corp BAC.N , JPMorgan JPM.N ,
Goldman Sachs GS.N and Citigroup C.N fell between 14% and
17% in premarket trading. Technology heavyweights such Apple
AAPL.O , Microsoft MSFT.O and Amazon AMZN.O were together
set to lose over $400 billion in market value. .N
"The central banks threw the kitchen sink at it yesterday
evening yet here we are (with deep falls in stock markets),"
said Societe Generale strategist Kit Juckes.
"There is a great sense that central banks are going to get
to grips with the issues of getting money flowing ... But the
human problem, the macro problem, there is nothing they can do
about that."
Almost everything was walloped. Oil, already reeling from a
price war, slumped 11% to almost $30 a barrel, metals buckled
and even traditional safe-haven gold dropped 5% as investors
fretted about the impact its global demand. MET/L GOL/
There were moves in Europe to curb short-selling of stocks,
while bond markets tried to juggle both the risk to vulnerable
countries but also that a fiscal spending splurge might impact
safe-haven debt. EUR/GVD
The Fed's emergency 100 basis point rate cut on Sunday was
matched by a restarting of its quantitative easing (QE) money
printing programme and more cheap U.S. dollar funding to ease a
ruinous logjam in global lending markets.
That was followed on Monday by further policy easing from
the Bank of Japan in the form of a pledge to ramp up purchases
of exchange-traded funds and other risky assets.
New Zealand's central bank shocked by cutting rates 75 basis
points to 0.25%, while the Reserve Bank of Australia (RBA)
pumped more money into its financial system. South Korea and
Kuwait both lowered rates, while Russia and Germany were
throwing together multi-billion dollar anti-crisis funds.
Japanese Prime Minister Shinzo Abe said G7 leaders would
hold a teleconference at 1400 GMT to discuss the crisis.
With global travel grinding to a standstill, Europe's travel
and leisure stocks index has halved in value in roughly three
weeks. .SXTP The drastic shock to demand delivered to airlines
and travel companies maybe replicated elsewhere.
MSCI's index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS tumbled 5.2% to lows not seen since early 2017,
while the Nikkei .N225 fell 2.5% as the BoJ's easing steps
failed to reassure markets.
Chinese data underscored just how much economic damage the
disease has already done to the world's second-largest economy,
with official numbers showing the worst drops in activity on
record. Industrial output plunged 13.5% and retail sales 20.5%.
In Asia, Shanghai blue chips .CSI300 fell 4.3% overnight
even as China's central bank surprised with a fresh round of
liquidity injections into the financial system. Hong Kong's Hang
Seng index .HSI tumbled 4%.
Australia's S&P/ASX 200 .AXJO plunged, finishing down 9.7%
-- its steepest fall since the 1987 crash. "By any historical standard, the scale and scope of these
actions was extraordinary," said Nathan Sheets, chief economist
at PGIM Fixed Income, who helps manage $1.3 trillion in assets.
"This is dramatic action and truly does represent a bazooka.
"Even so, markets were expecting extraordinary action, so it
remains to be seen whether the announcement will meaningfully
shift market sentiment."
Sheets emphasised investors wanted to see a lot more U.S.
fiscal stimulus and evidence the Trump administration was
responding vigorously and effectively to the public health
challenges posed by the crisis.
UNDER STRAIN
Wall Street's worries were raised after New York and Los
Angeles both ordered bars, restaurants, theatres and cinemas to
shut to combat the spread of the coronavirus, mirroring similar
measures in Asia and Europe.
Markets have been severely strained as bankers, companies
and individual investors stampede into cash and safe-haven
assets while selling profitable positions to raise money to
cover losses in savaged equities. To ease the dislocation, the Fed cut interest rates by a
full percentage point on Sunday to a target range of 0% to
0.25%, its second cut this month, and promised to expand its
balance sheet by at least $700 billion in coming weeks.
U.S. President Donald Trump, who has been haranguing the Fed
to ease policy, called the move "terrific" and "very good news".
The Fed's rate cut combined with the promise of more
bond-buying pushed U.S. 10-year Treasury yields down sharply as
low as 0.63% US10YT=RR from 0.95% late on Friday, though they
were back up to 0.76% in early U.S. trading.
In Europe, Spanish and Portuguese 10-year bond yields rose
to 9-1/2 month highs at 0.74% and 0.93% respectively, up as much
as 13 basis points on the day ES10YT=RR PT10YT=RR .
French 10-year yields also soared as much as 14 basis points
to 3-1/2 month highs at 0.14% FR10YT=RR , while Italian 10-year
yields were up 17 basis points at 1.98% IT10YT=RR having
briefly touched 2%. GVD/EUR
"The momentum we've seen in the periphery is largely to do
with the sentiment towards debt metrics in countries which after
many, many years of quantitative easing and existing central
bank support within the euro zone, are going into another fairly
significant if not larger crisis than the one before," said
Rabobank strategist Matt Cairns.
The fall in U.S. Treasury yields pounded the dollar. It was
last down 1.9% on the Japanese yen at 106.01 JPY= , marking its
second-biggest fall since May 2017 following a bigger drop last
week. The euro went up as far as 1% to $1.1212 EUR= . /FRX
The commodity-exposed Australian dollar fell as much as 0.3%
to $0.6166 AUD=D3 while the New Zealand dollar NZD=D3
slipped 0.2% to $0.6044.
Oil plunge left Brent crude LCOc1 off $3.20, or 9.5% at
$30.70 per barrel while U.S. crude slipped $2 to just below $30
a barrel. O/R
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Coronavirus pummels markets https://tmsnrt.rs/2IPoKIb
World stocks plunge on virus worries https://tmsnrt.rs/3aYuAD1
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