Equity markets collapsed Monday as the rapidly spreading coronavirus fans fears over the global economy, while a crash in oil prices added to the panic with energy firms taking a hammering and wiping hundreds of billions off valuations.
As the deadly disease claims more lives around the world, dealers are fleeing out of riskier assets and into safe havens, sending gold and the yen surging and pushing US Treasury yields to new record lows.
While governments and central banks have unleashed or prepared to roll out stimulus measures, the spread of COVID-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.
Trading floors were a sea of red, with Tokyo and Manila plunging more than five per cent, while Hong Kong dived 3.6 percent. Sydney shed 7.3 per cent.
Mumbai, Taipei, Singapore, Seoul, Jakarta and Wellington were more than three percent down, Shanghai shed 2.5 per cent and Bangkok gave up 6.8 per cent. The losses tracked sharp falls in Europe and Wall Street on Friday.
Driving the declines was a ferocious sell-off in the oil markets, sparked by top exporter Saudi Arabia slashing prices -- in some cases to unprecedented levels -- after a bust-up with Russia over production.
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Both main oil contracts -- which had already been under pressure over falling demand caused by the virus -- dived around 30 percent, marking the worst drop since the 1991 Gulf War and the second biggest fall on record, according to Bloomberg News.
Saudi Arabia launched an all-out oil war Sunday with the biggest cut in its prices in the past 20 years, Bloomberg News reported, after OPEC and its allies failed to clinch a deal to reduce output.
A meeting of main producers was expected to agree to deeper cuts to counter the impact of the coronavirus -- but Moscow refused to tighten supply.
In response, Riyadh slashed its price for April delivery by USD 4-USD 6 a barrel to Asia and USD 7 to the United States.
Russia's decision not to comply had already battered prices and there are warnings they could continue to drive lower towards $20 if the two sides do not reach an agreement.
"Something like this could have more global repercussions than a trade war between China and the US because oil touches so many things in the world economy," said Rohitesh Dhawan, director of energy, climate and resources at Eurasia Group in London.
Jeffrey Halley, senior market analyst at OANDA, said: "Saudi Arabia seems intent on punishing Russia.
"Oil prices... will likely be capped over the next few months as coronavirus stalls economic growth, and Saudi Arabia opens the pumps and offers huge discounts on its crude grades."