* MSCI All-Country World index enters bear market
* European shares hit lowest in nearly 4 years
* Oil slumps, safe haven assets gain
* U.S. stock futures down
By Ritvik Carvalho
LONDON, March 12 (Reuters) - Global stocks plunged into a
bear market and oil slumped on Thursday after U.S. President
Donald Trump banned travel from Europe to stem the coronavirus,
threatening more disruption to the world economy.
With the pandemic wreaking havoc on the daily life of
millions, investors were also disappointed by the lack of broad
measures in Trump's plan to fight the pathogen, prompting
traders to bet on further aggressive easing by the Federal
Reserve.
"He (Trump) did not announce any new concrete measures such
as a large-scale payroll tax cut to buffer the economy against
the impending coronavirus slowdown," said Jeffrey Halley, senior
market analyst at OANDA.
"That has probably disappointed markets more than anything."
European shares .STOXX plummeted to their lowest in almost
four years, with the benchmark STOXX 600 index falling 4.9% in
early deals. Travel and leisure stocks shed 8.6%, hitting their
lowest in more than 6 years. .SXTP
The falls pushed the MSCI All-Country World Index, which
tracks stocks across 49 countries, into bear market territory,
down 20% from its 52-week peak.
The index was down nearly 2% on the day.
Investors also rushed to safe-haven assets from bonds to
gold to the yen and the Swiss franc.
U.S. S&P 500 futures ESc1 plummeted as much as 4.9% in
Asia and last traded down 4.07 , a day after the S&P 500 .SPX
lost 4.89%, leaving the index on the brink of entering bear
market territory, defined as a 20% fall from a recent top.
Those fears left a trail of red across many markets.
Japan's Nikkei .N225 crumbled 4.4% to a trough last seen
almost three years ago while MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 4.7%.
Australian shares .AXJO plunged 7.4% to the lowest level
in more than three years while Seoul's Kospi .KS11 fell 4.8%
to 4-1/2-year lows with massive selling prompting a brief trade
halt. Thai shares .SETI sank 8.8% to 8-year lows.
Trump announced on Wednesday the United States will suspend
all travel from Europe, except from Britain, to the United
States for 30 days starting on Friday. However, Trump said trade
will not be affected by the restrictions. He also announced some other steps, including instructing
the Treasury Department to defer tax payments for entities hit
by the virus.
"The travel ban from Europe has definitely taken everyone by
surprise," said Khoon Goh, head of Asia Research at ANZ in
Singapore.
"Already we know the economic impact is significant, and
with this additional measure on top it's just going to multiply
the impact across businesses. This is something that markets had
not factored in ... it's a huge near-term economic cost."
In the money market, traders further raised expectations of
another U.S. rate cut, even after the Fed's emergency cut last
week.
Fed fund rate futures 0#FF: are now pricing in a large
possibility of a 1.0 percentage point cut, rather than 0.75, at
a policy review on March 17-18.
PANDEMIC
The World Health Organization (WHO) described the outbreak
as a pandemic for the first time on Wednesday. The highly infectious disease that shut down most of China
for much of February is spreading rapidly in Europe and
increasingly in the United States, disrupting many corners of
life from education to sports, entertainment and dining.
Investors worry how much of an effect policies can have in
turning around the global economy given the restrictions on
daily life, travel and business.
A case in point was Britain, where the FTSE stock index
.FTSE hit near four-year lows on Wednesday as investors
doubted whether the $39 billion spending plan and the Bank of
England's 0.5 percentage point rate cut announced on Wednesday
would be enough to counter the shock from the outbreak.
The index fell even further on Thursday, down 6.25%.
The British pound last stood at $1.2792 GBP=D4 , down 0.16%
on the day.
Safe-haven assets were back in favour.
Gold XAU= edged up half a percent to $1,641.71 per ounce
but still stood well below Monday's high above $1,700.
The 10-year U.S. Treasuries yield fell to 0.7442%
US10YT=RR , though it is still above a record low of 0.318%
touched on Monday.
The two-year yield US2YT=RR fell to 0.4314%, but stood
well above Monday's low of 0.251%.
In commodities, oil prices were hit by an intensifying price
war between Saudi Arabia and Russia, on top of fears of a sharp
slowdown in the global economy.
The United Arab Emirates followed Saudi Arabia in promising
to raise oil output to a record high in April. U.S. West Texas Intermediate (WTI) crude CLc1 shed 4.94%
to $31.35 per barrel.
Copper, seen as a gauge of global economic health because of
its wide industrial use, fell to over three-year lows. MET/L
In the currency market, the dollar slid against the
safe-haven yen and the Swiss franc.
The U.S. currency fell 0.8% to 103.63 yen and lost 0.14% to
0.9366 franc CHF= .
The euro traded at $1.1265 EUR= , down 0.04% ahead of the
European Central Bank's policy meeting later in the day.
The ECB is all but certain to unveil new stimulus measures,
including new, ultra-cheap loans for banks to pass onto small
and medium-sized firms.