* Nikkei down 8% for 17% weekly plunge
* Australia, Korea, Hong Kong all sink
* U.S. futures negative
* Dow posts worst drop since 1987
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook
SINGAPORE, March 13 (Reuters) - Global stock markets crashed
on Friday, ending a years-long bull run, with coronavirus panic
selling hitting almost every asset class and leaving investors
nowhere to hide.
Half a trillion dollars in liquidity from the U.S. Federal
Reserve and the promise of more were not enough to calm the fear
that has wiped some $14 trillion from world stocks in a month.
On Friday, Japanese stocks were in freefall and markets from
Seoul to Jakarta punched through downlimit circuit breakers.
The Nikkei .N225 dropped as far as 10% and is heading for
its worst week since the 2008 financial crisis. Not one stock on
the index is in positive territory. .T
Losses were equally staggering outside Japan, driving MSCI's
broad Asia-Pacific index .MIAPJ0000PUS back to where it was in
2017. Gold and oil fell and once-safe sovereign bonds slumped as
investors liquidated everything they could to cover losses.
Even after its worst crash since Black Monday in 1987
overnight, Dow futures YMc1 are down about 3% in Asia, as are
S&P 500 futures ESc1 . .N
"There is a sense of fear and panic," said James Tao, an
analyst at stockbroker Commsec in Sydney, where phones at the
high-value client desk rang non-stop.
"It's one of those situations where there is so much
uncertainty that no-one quite knows how to respond...if it's
fight or flight, many people are choosing flight at the moment."
Australia's benchmark .AXJO fell as far as 8% and is set
for its worst week on record. In South Korea the won was
shredded and the Kospi .KS11 fell 7.7%.
Hong Kong's Hang Seng index .HSI fell 5%. China's Shanghai
composite .SSEC fell 3%.
In currency markets the dollar was king and Asian currencies
haemorrhaged as fears of systemic risks drove demand for the
world's reserve currency. FRX/
Majors stabilised after furious dollar buying overnight,
with the euro EUR= finding footing around $1.1200 and the
Aussie AUD=D3 recovering to $0.6300.
Emerging market currencies were punished: the won KRW= and
baht THB= dropped 1% and the rupiah IDR= 2%. EMRG/FRX
FALLING KNIVES
The plunge, as the coronavirus pandemic spreads, gathered
pace after U.S. President Donald Trump spooked investors with a
move to restrict travel from Europe, and after the European
Central Bank disappointed markets by holding back on rate cuts.
In a televised address late on Wednesday, Trump imposed
restrictions on travel from Europe to the United States,
shocking investors and travellers. Traders were disappointed after hoping to see broader
measures to fight the spread of the virus and blunt its expected
blow to economic growth.
"Government bureaucracy simply has not kept pace with the
nature of the outbreak and market expectations," said Tai Hui,
Chief Asia Market Strategist, J.P. Morgan Asset Management.
"We need to see the number of new infections stabilise...we
also need to see fiscal and monetary policy support
implementation," he said.
"Hence, we are not looking at a specific time or valuation
to advise investors to add back equities."
Trade was halted on the S&P 500 .SPX. overnight after it
hit circuit breakers. It fell further when trade resumed,
eventually losing 9.5% to close 27% below February's peak.
The VIX volatility index .VIX - Wall Street's "fear gauge"
- and an equivalent measure of volatility for the Euro Stoxx 50
.V2TX hit their highest since the 2008 financial crisis.
Gold XAU= , usually a safe harbour in times of panic, has
fallen 4% to $1,563.42 an ounce in two days. Bond yields, which
rise when prices fall, lifted on long-dated U.S. Treasuries
overnight and held there on Friday.
Sovereign 10-year yields for Australia, Japan, New Zealand,
Thailand, Korea and Singapore rose. US/ GOL/
"Wherever anyone has any risk, people just want to bring
risk back to flat at the moment, that's what happening," said
Stuart Oakley, Nomura's global head of flow FX in Singapore
"This is what happens when you get what's known as a
value-at-risk shock, where people have drawn down so much P&L
that they just need to draw down all risk."
To try and head off the sort of dislocation that saw markets
seize up during the financial crisis more than a decade ago, the
New York Federal Reserve surprised by pumping huge amounts of
cash into the banking system. After adding $500 billion on Thursday, it will inject
another $1 trillion on Friday in an effort to stop borrowing
costs from rising. Australia's central bank injected an
unusually large $5.5 billion into the financial system.
In commodities, Brent crude is set for its biggest weekly
drop since 1991 and was going backwards on Friday. O/R
Brent LCOc1 was down 50 cents, or 1.5%, at $32.74 a barrel
after falling more than 7% on Thursday. U.S. crude CLc1 was
down 1.6% at $30.99 per barrel.
(Editing by Sam Holmes)