GLOBAL MARKETS-Stocks dive as rescue bids by Fed, peers fail to calm panicky markets

* Dollar slides vs yen, gains on commodity currencies
* ASX 200 plunges almost 10%, Nikkei drops 2%
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Wayne Cole and Kane Wu
SYDNEY/HONG KONG, March 16 (Reuters) - Stock markets were
routed and the dollar stumbled on Monday after the Federal
Reserve slashed interest rates in an emergency move and its
major peers offered cheap U.S. dollars to ease a ruinous logjam
in global lending markets.
European markets were also poised to open sharply lower,
with EUROSTOXX 50 futures STXEc1 down 3.4% and FTSE futures
down FFIc1 down 2.7%. E-mini futures for the S&P 500 index
ESc1 hit their downlimit in the first quarter-hour of Asian
trade as investors rushed for safety.
The Fed's emergency 100 basis point cut on Sunday was
followed on Monday by the Bank of Japan easing policy further
with a pledge to ramp up purchases of exchange-traded funds and
other risky assets. New Zealand's central bank also shocked by cutting rates 75
basis points to 0.25%, while the Reserve Bank of Australia (RBA)
pumped more money into a strained financial system.
Japanese Prime Minister Shinzo Abe said G7 leaders would
hold a teleconference at 1400 GMT to discuss the crisis.
The drastic manoeuvres were aimed at cushioning the economic
impact as the breakneck spread of the coronavirus all but shut
down more countries, though they had only limited success in
calming panicky investors.
MSCI's index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS tumbled 4% to lows not seen since early 2017,
while the Nikkei .N225 fell 2% as the Bank of Japan's easing
steps failed to stabilise market confidence.
Data out of China also underscored just how much economic
damage the disease had 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%. "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."
He emphasised investors wanted to see a lot more U.S. fiscal
stimulus put to work and evidence the Trump administration was
responding vigorously and effectively to the public health
challenges posed by the crisis.
"The performance of the economy and the markets will be
mainly determined by the severity and duration of the virus'
outbreak."
Shanghai blue chips .CSI300 fell 3% 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 3.4%.
Australia's S&P/ASX 200 .AXJO plunged, finishing down 9.7%
for its steepest fall since the 1987 crash. STRAIN
Markets have been severely strained as bankers, companies
and individual investors stampeded into cash and safe-haven
assets, while selling profitable positions to raise money to
cover losses in savaged equities. Such is the dislocation the Fed cut interest rates by 100
basis points on Sunday to a target range of 0% to 0.25%, and
promised to expand its balance sheet by at least $700 billion in
coming weeks. Five of its peers also joined up to offer cheap U.S. dollar
funding for financial institutions facing stress in credit
markets. U.S. President Donald Trump, who has been haranguing the Fed
to ease policy, called the move "terrific" and "very good news."
"It may be a shot in the arm for risk assets and help to
address liquidity concerns...however, it also raises the
question of whether the Fed has anything left in the tank should
the spread of the virus not be contained," said Kerry Craig,
global market Strategist at J.P. Morgan Asset Management.
"We really need to see the fiscal side...to prevent a longer
than needed economic slowdown."
The Fed's rate cut combined with the promise of more bond
buying pushed U.S. 10-year Treasury yields down sharply to 0.68%
US10YT=RR , from 0.95% late on Friday.
That pressured the U.S. dollar at first, though it regained
some ground as the Asian session wore on. The dollar was last
down 1.4% on the Japanese yen at 106.37 JPY= . The euro was
flat at $1.1123 EUR= .
The commodity-exposed Australian dollar fell 0.3% to $0.6166
AUD=D3 while the New Zealand dollar NZD=D3 slipped 0.2% to
$0.6044.
Oil prices fell on concerns about global demand. Brent crude
LCOc1 was last off $1.31 at $32.54 per barrel while U.S. crude
slipped 78 cents to $30.94 a barrel. O/R
Gold rallied 0.8% to $1,541.34 XAU= .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>