World markets pummel amidst coronavirus fears and falling oil prices

Global stock markets

plunged

on Monday and oil prices tumbled by as much as a third after Saudi Arabia launched a price war with Russia , sending investors already spooked by the coronavirus outbreak fleeing for the safety of bonds and the Japanese yen.

A benchmark pan-Europe index entered bear market territory and a 7% slide in the S&P 500 at the open on Wall Street triggered a circuit-breaker put in place after the financial crisis a decade ago, halting U.S. stock trading for 15 minutes.

The yield on the 10-year U.S. Treasury note slid as low as 0.318%—a level unthinkable just a week ago—and German government debt yields set fresh record lows as investors rushed to cut risk assets and snap up safe-havens. Gold briefly topped USD$1,700 an ounce for the first time since 2012 and is up more than 10% so far this year.

The rout’s depth, sparked after Saudi Arabia stunned markets on Sunday with plans to hike oil production sharply following the collapse of the Organization of the Petroleum Exporting Countries ’ supply-cut agreement with Russia , unnerved investors.

Saudi Arabia

’s grab for market share was reminiscent of a drive in 2014 that sent prices down by about two-thirds, while the renewed plunge on Wall Street came exactly 11 years after U.S. stocks touched bottom during the financial crisis. The losses in Europe amplified declines in Asia .

The European Central Bank meets on Thursday and will be under intense pressure to act, but rates are already deeply negative. Data suggested the global economy toppled into recession this quarter.

sg