LONDON: World oil prices crashed yesterday, fuelling a vicious selloff on stock markets which were already buckling under intense pressure over the spreading coronavirus outbreak. Stocks tanked as the global oil market nosedived 30 percent at one stage after top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts. The dollar slid versus the yen, seen as a safe haven investment.

US equities plunged yesterday as trading resumed following a slump in oil prices. Trading on US stock exchanges was halted immediately after opening as the S&P 500 fell 7 percent, triggering an automatic 15-minute cutout put in place after the 2008-9 financial crisis. The S&P was last down around 5.5 percent. Benchmark ten-year yields fell to a record low of 0.318 percent and were last at 0.487 percent. The dollar index against a basket of currencies was down 0.4 percent.

"There is no mincing words here-Wide price swings are never comfortable and the markets are moving at breakneck speeds. "Consistent patterns of whipsawed equities and plummeting Treasury yields have certainly unnerved investors and the latest domino to fall is severe oil losses. No doubt, many are taking a hard look at their portfolio.

"The markets have passed from panic mode into pure hysteria," said Ayush Ansal, chief investment officer at trading firm Crimson Black Capital. "Markets were at breaking point before Saudi Arabia's decision to launch an oil price war but this latest development has taken them beyond that." OPEC kingpin Saudi Arabia last week wanted Russia to join the cartel in deep production cuts after world oil prices slumped on forecasts of plunging demand because of COVID-19.

However, Moscow declined, triggering Riyadh's move to preserve market share and sideline its close competitor-but it has created fresh market chaos. "The war against the coronavirus is turning into a war for oil export markets," said analyst Tamas Varga at oil broker PVM Associates. The dizzying oil drop-the steepest since the 1991 Gulf War-sent investors fleeing for safety alongside mounting fears over the worsening coronavirus, which has seen Italy lock down a swathe of its north.

'Black Monday'
"This will be remembered as Black Monday," said analyst Neil Wilson at trading site Markets.com. Italy's stock market took the heaviest battering after a chunk of the county's northern region was sealed off-including Milan and Venice-as authorities struggled to contain the spread and impact of coronavirus. In exceptionally volatile trade, Milan's FTSE MIB index shed more than 11 percent in mid-afternoon trade.

As the disease claims more lives around the world, dealers are shedding riskier assets for safe havens, sending gold and the yen surging and pushing US Treasury yields to record lows. While governments and central banks have unleashed or prepared stimulus measures, the spread of COVID-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

Trading floors in Asia were also a sea of red, with Tokyo plunging more than five percent by the close, while Hong Kong shed 4.2 percent. Sydney slumped 7.3 percent. Saudi equities tanked more than nine percent with oil titan Aramco's share price losing 10 percent. Dubai and Kuwait stock markets sank a similar amount, while Abu Dhabi was almost eight percent down.

Energy firms hammered
Oil majors also bore the brunt of a fierce wave of selling while other commodities firms nursed heavy losses. Hong Kong-listed CNOOC tumbled 17 percent and PetroChina more than nine percent, while in Tokyo, Inpex dived 13 percent. In Sydney, Santos dived 27 percent and Woodside Petroleum tanked 18.4 percent.

In London, BP shares dived 18.2 percent and Shell 12.7 percent at one stage. French energy major Total slumped 11.6 percent. Among miners, Anglo American shed 9.4 percent and BHP Billiton sank 14 percent. Analysts meanwhile warned of further gyrations as the outbreak shows no sign of abating, with more than 110,000 people infected in scores of countries-including Italy, which is now the hardest-hit country outside China. - Agencies