* European stocks buckle after early gains
* Wall Street futures chop back gains
* Oil gives up $1 bounce
* Dollar recoups ground on the yen
* Australian shares surge, Nikkei ends flat
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
*
By Marc Jones
LONDON, March 17 (Reuters) - World share markets and oil
prices struggled on Tuesday after coronavirus panic caused Wall
Street's worst one-day rout since the Black Monday crash of
1987.
In Europe, early 1.5.% to 3% gains in London, Frankfurt and
Paris were quickly wiped out .EU as airline and travel stocks
.SXTP suffered a 6.5% drubbing. .EU
The dollar recouped some lost ground against the safe-haven
Japanese yen /FRX . Oil gave up attempted gains after Brent's
drop below $30 a barrel on Monday O/R .
"We saw quite a staggering drop yesterday, so it might just
be a bit of calm after that storm," said Rabobank analyst Bas
Van Geffen. "But we are not sure."
Financial markets cratered on Monday with the S&P 500 .SPX
tumbling 12%. Emergency central bank rate cuts globally only
added to the investor panic.
Tuesday's stabilisation saw Australian shares .AXJO close
5.9% higher, their biggest daily percentage gain since October
2008, after plunging nearly 10% on Monday.
MSCI's broadest index of Asia-Pacific shares .MIAPJ0000PUS
and Japan's Nikkei .N225 both finished steady. South Korea
.KS11 finished down 2.4%, however, and the Philippines became
the first country to suspend all trading over the virus.
Futures trade still pointed to a positive open in U.S.
markets. The S&P 500 e-minis ESc1 , were up 1%, although
earlier they had been up 3.8%. .N
Some $2.7 trillion in market value was wiped from the S&P
500 on Monday as it suffered its third-largest daily percentage
decline on record. Over the past 18 days, the benchmark index
has lost $8.3 trillion. World stocks .MIWD00000PUS have
haemorrhaged over 15 trillion.
"The move in U.S. stock futures prompted some buying of
battered down shares and lifted dollar/yen," said Junichi
Ishikawa, senior FX strategist at IG Securities in Tokyo.
"The focus is shifting to the fiscal response to the virus.
We're locked in a pattern where markets bounce and then resume
falling."
WAITING FOR HELP
Gold, which is normally bought as a safe haven, extended
declines on Tuesday as some investors chose to sell whatever
they could to keep their money in cash. GOL/
The U.S. Federal Reserve stunned investors with another
emergency rate cut on Sunday, prompting other central banks to
ease policy in the biggest coordinated response since the global
financial crisis more than a decade ago.
Investors, however, are worried that many have used up their
ammunition and that more draconian restrictions on personal
movement are necessary to contain the global coronavirus
outbreak.
Group of Seven finance ministers are expected to hold a call
on Tuesday night. Markets want to see public health progress as
well as fiscal stimulus.
"I think the priorities of the governments around the world
will probably move away from economic growth towards containing
the virus," said Jim McCafferty, Nomura's joint head of APAC
equity research.
"Safety of national citizens might become a bigger priority.
But with that they want to keep the economies in a working
situation."
Traders are also looking to data due later, which is
forecast to show German investor sentiment tumbled in March.
The United States will release retail sales and industrial
production for February, but that is unlikely to reflect the
impact of the coronavirus just yet.
Some investors say markets will not settle unless the U.S.
government announces a big fiscal spending package to match the
Fed's rate cuts and efforts to keep credit markets functioning.
Others say liquidity in some financial markets is starting
to fall because there's such a high degree of uncertainty,
meaning even some of the usual safe havens may not be that safe.
In the currency market, the dollar rose 0.5% to 106.40 yen
JPY=EBS , after a 2% decline the day before, when the Fed's
rate cut rippled through financial markets.
Germany's benchmark 10-year Bund yield rose to a one-month
high in bond markets on growing expectations of a government
spending blast.
Long-dated German bond yields have jumped 50 basis points
from record lows hit just over a week ago. Borrowing costs in
France and Spain have hit their highest since last May.
EUR/GVD
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