* 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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>