Asian markets take another hit as virus sweeps globe

Asian markets fell on Wednesday, with the coronavirus spreading rapidly around the world and health chiefs warning that governments were not prepared for the outbreak.

The heavy selling, after a day of relative calm caused by bargain-buying, followed another rout on Wall Street where all three main indexes lost around three percent after officials said COVID-19 would likely take hold in the United States.

With cases being reported in new countries -- and lockdowns in nations including Austria, Italy and Spain -- traders are growing increasingly fearful about the impact on the global economy.

The death toll is now at more than 2,700 while those infected are approaching 80,000, although new cases in China, the epicentre, are falling.

At the World Health Organisation headquarters in Geneva, Bruce Aylward, who headed an international expert mission to China, hailed the drastic quarantine and containment measures taken by the country.

But he told reporters that other nations were "simply not ready" for reining in the outbreak, adding: "You have to be ready to manage this at a larger scale...and it has to be done fast." The WHO said countries must "prepare for a potential pandemic" -- a term used to describe an epidemic that spreads widely throughout the world.

Tokyo and Shanghai each ended down 0.8 per cent, having shed more than three per cent Tuesday, while Hong Kong lost 0.7 per cent.

Sydney shed more than two per cent, while Seoul, Singapore, Wellington and Jakarta were all down more than one per cent. Manila tumbled almost four per cent as it resumed trading after a one-day holiday. Taipei and Bangkok were also well down.

In early trade, London fell 0.5 per cent, Frankfurt sank one per cent and Paris was off 0.7 per cent.

"What we appear to be seeing is the realisation that global economic growth could well come to a halt as the combined effects of a flu virus and belated attempts to stem the spread of it across the globe, raise the prospect of an economic sneeze," said CMC Markets UK analyst Michael Hewson.

With panicking investors rushing into safe havens, the yield on both 10-year and 30-year US Treasury bills are sitting at record lows, while the Japanese yen climbed and the dollar advanced against high-yielding currencies.

However, the dollar was being kept in check by speculation the Federal Reserve could cut interest rates to support markets, though for now officials are saying the US economy remains in rude health.

Oil prices were down again after three days of steep losses that have wiped about seven percent off both main contracts, although observers warn the virus's spread to the giant US economy could deal it further pain.

The VIX "fear" index is at its highest level in more than a year, though gold, usually a main target for those seeking shelter from the turmoil, was subdued, with analysts suggesting this could be down to traders cashing out to cover equity margin calls.

"To suggest the market is a tad skittish over the coronavirus becoming a pandemic could very well be the understatement of the century with the virus morphing into the market's biggest macro worry of the decade," said AxiCorp's Stephen Innes.

Still, Gorilla Trades strategist Ken Berman added: "In light of the quick spreading of the virus, the global economy is likely to suffer, at least, a short-term shock, but should the outbreak slow down during the spring, we could see a swift economic recovery.