GLOBAL MARKETS-Shares drop, gold surges as coronavirus fears trigger flight for safety

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan down 0.7%, Japan closed for public holiday
* E-mini futures for S&P500 fall 1% in early Asia trading
* Gold prices surge to highest since 2013
* South Korea on high alert after virus cases surged over
600
* Coronavirus has killed 2,442 people in China

By Swati Pandey
SYDNEY, Feb 24 (Reuters) - Global shares and oil extended
losses on Monday while safe-haven gold soared as the spread of
the coronavirus outside China accelerated with infections
jumping in South Korea, Italy and the Middle East, in a worrying
new development in the outbreak.
South Korea put the country on high alert after the number
of infections surged to over 600 with six deaths. In Italy,
officials said a third person infected with the flu-like virus
had died, while the number of cases jumped to above 150 from
just three before Friday. Iran, which announced its first two cases on Wednesday, said
it had confirmed 43 cases and eight deaths, with most of the
infections in the Shi'ite Muslim holy city of Qom. Saudi Arabia,
Kuwait, Iraq, Turkey and Afghanistan imposed travel and
immigration restrictions on the Islamic Republic.
In a sign of panic, E-minis for the S&P500 ESc1 dropped 1%
in early Asian trades while Nikkei futures NKc1 slipped more
than 1% too.
Australia's benchmark index slid 1.6% while New Zealand was
down about 1%. .AXJO .NZ50 South Korea's KOSPI index .KS11
fell 2.2%.
That left MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS off 0.7% to 541.48, the lowest
since Feb. 5. Japanese markets were closed for a public holiday.
"It promises to be an interesting session here in Asia, with
the bears back wrestling a bit more of a say here, and gold and
bond bulls feeling pretty good about their exposures," said
Chris Weston, head of research at broker Pepperstone.
"The news flow from the weekend has changed the game
somewhat, where the focus is much more on the threat of an
outbreak outside of China."
The virus has killed 2,442 people in China, which has
reported 76,936 cases, and slammed the brakes on the world's
second largest economy.
It has spread to some 28 other countries and territories,
with a death toll of around two dozen, according to a Reuters
tally. Investors fretted over the mounting economic toll from the
virus, betting on more monetary policy action from central
banks. In response, U.S. Fed fund futures 0#FF: surged
signalling more rate cuts later this year.
While markets had largely brushed aside fears of long-term
economic damage from the virus, a steady drip of new cases in
countries beyond China has kept concerns alive.
On Friday, U.S. stocks were beaten down by concerns about
the virus and after data showed American business activity
stalled in February, signaling a contraction for the first time
since 2016. .N
U.S. chipmakers fell sharply last week as a flash reading of
the IHS Markit services sector Purchasing Managers' Index
dropped to its lowest level since October 2013. The
manufacturing sector also clocked its lowest reading since
August. The dollar fell for a second straight session on Monday
against the yen JPY= to be last at 111.48.
The Australian dollar, considered a liquid proxy for China
plays, was down 0.4% as it languished near an 11-year low.
The euro EUR= eased a tad to $1.0836.
That left the dollar index =USD slightly higher at 99.430.
Analysts expect the Korean won to slump against the dollar
as one of the favourite risk proxies for investors. KRW=
The won has fallen more than 4.5% on the dollar so far this
year. KRW= It was last unchanged at 1,206.87
"Whether this proves to be a driver of more mainstream FX
pairs, such as AUDJPY and AUDUSD is yet to be seen, although
AUDUSD looks the better short on the weekly chart,"
Pepperstone's Weston said.
Oil prices slid as investors fretted about crude demand
being pinched by the impact of the coronavirus outbreak, while
leading producers appeared to be in no rush to curb output.
Brent crude LCOc1 slumped 2.8%, or $1.63, to $56.87 a
barrel while U.S. crude CLc1 dropped 2.6%, or $1.4, to $51.97
a barrel.
U.S. gold futures GCcv1 climbed 1.2% at $1,668.6 an ounce.
Spot gold XAU= jumped to a seven-year high of 1,678.58 after
marking its biggest weekly gain last week since early August.

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(Editing by Sam Holmes)