GLOBAL MARKETS-Steep losses in China stocks hit Asia, oil tumbles as virus fears grow

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Risk assets slump in Asia, led by sharp losses in China
stocks
* Worries about China virus before Lunar New Year
* Oil extends decline on worries about virus, supply glut

By Stanley White
TOKYO, Jan 23 (Reuters) - Asian shares tumbled on Thursday,
led by the biggest slide in Chinese stocks in more than eight
months, as investors grew more anxious about the spread of a new
flu-like virus in China just as millions prepared to travel for
the Lunar New Year.
The likely hit to airline travel from the contagion sent
oil futures skidding to seven-week lows, while the International
Energy Agency's warning of an oil surplus and a
larger-than-expected increase in U.S. crude inventories
re-kindled fears of excess supply.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 1.07%.
Chinese shares .CSI300 suffered a steep 3.04% loss, on
course for their biggest daily decline since May 6, 2019, when
U.S. President Donald Trump's threats of additional tariffs on
Chinese goods roiled financial markets.
Shares in Hong Kong .HSI also took a beating, down 1.91%,
while Japan's Nikkei stock index .N225 slid 0.99%.
Euro Stoxx 50 futures STXEc1 were down 0.4%, suggesting
European shares are also heading into a rough trading session.
The Chinese yuan fell to a two-week low, while safe-havens
such as the Japanese yen, gold, and U.S. Treasuries rose as a
travel blockade of the Chinese city Wuhan, the epicentre of the
outbreak, started earlier on Thursday.
Deaths in China from the new coronavirus rose to 17 on
Wednesday, with nearly 600 cases confirmed. The outbreak has
evoked memories of Severe Acute Respiratory Syndrome (SARS) in
2002-2003, another coronavirus which broke out in China and
killed nearly 800 people in a global pandemic. "Markets are expressing concern about the growth outlook,"
said Michael McCarthy, chief market strategist at CMC Markets in
Sydney.
"The coronavirus has introduced some caution. There is no
reason to expect a global pandemic now, but there is some
repricing in financial markets."
U.S. stock futures ESc1 fell 0.2% on Thursday in Asia.
The S&P 500 .SPX eked out a 0.03% gain on Wednesday, but
the overall tone on Wall Street was mixed as investors assessed
the impact of the virus and braced for the corporate earnings
season.
Cases have been detected in Beijing, Shanghai, Macau, Hong
Kong, Japan, and the United States. China put Wuhan, a city of
11 million people, on lockdown earlier on Thursday by closing
public transportation hubs and suspending outgoing flights.
However, there are fears the virus could spread rapidly,
because millions of Chinese travel domestically and abroad
during the week-long Lunar New Year holidays, which start on
Friday.
Air China 601111.SS , China's flagship carrier, skidded
4.06% to the lowest in nine weeks. Shares of Australia's Qantas
Airways Ltd QAN.AX fell 1.77%, while Japan Airlines Co
9201.T dropped 1.82% and rival air carrier ANA Holdings Inc
9202.T declined 1.84%.
In the onshore market, the yuan CNY=CFXS fell 0.25% to
6.9261 per dollar, reaching the lowest since Jan. 10.
The yen JPY=EBS rose 0.25% to 109.58 versus the dollar,
while the Swiss franc CHF=EBS traded at 0.9684 against the
greenback.
Gold XAU= , another asset that is often bought as a safe
haven, rose 0.08% to $1,559.73 per ounce. GOL/
The yield on benchmark 10-year Treasury notes US10YT=RR
fell to 1.7482% in Asia as some investors sought the safety of
government debt.
U.S. crude CLc1 fell 1.78% to $55.73 a barrel, touching
the lowest since Dec. 3. Brent crude LCOc1 slumped by 1.52% to
$62.25 per barrel to reach the lowest since Dec. 4.
The American Petroleum Institute said U.S. crude inventories
rose 1.6 million barrels last week, compared with analysts'
expectations for 1 million-barrel draw. EIA/S
Markets took Trump's impeachment trial in stride, as he is
widely expected to be acquitted in the Republican-controlled
Senate.
Democrats accused Trump at the start of his impeachment
trial on Wednesday of a corrupt scheme to pressure Ukraine to
help him get re-elected. Trump told reporters in Switzerland the Democrats did not
have enough evidence to find him guilty and remove him from
office.

(Editing by Shri Navaratnam)