* Australian financials drop on prospects for further rate cuts
* "Another rate cut and QE seem inevitable" - ANZ analysts (Updates to close)
By Nikhil Subba
March 16 (Reuters) - Australia's benchmark stock index dove the most since 1987 on Monday as investors worried that a raft of stimulus measures, including the U.S. Federal Reserve's policy actions, would fall short of stemming the economic impact of the coronavirus.
The benchmark S&P/ASX 200 index .AXJO sunk 9.7%, or 537 points, to 5,002.00 at the of close trade, as the sell-off worsened in the final minutes of trading.
"A mixture of the Fed's emergency move once again triggering fresh concerns and the fear that the central banks' support may not be enough to cushion the impact had the risk-off mood raging across the market into the start of the week," said Jingyi Pan, a market strategist at IG.
The U.S. Federal Reserve slashed interest rates by 100 basis points to near zero overnight and promised to expand its balance sheet by at least $700 billion in coming weeks. MKTS/GLOB
The move, however, failed to soothe investors panicking over the fast-spreading coronavirus, with just three of the benchmark's 200 stocks ending in positive territory.
Financial stocks .AXEJ , which constitute about a third of the main index, plunged 11.1% to their lowest since 2004 and were the top drags on the benchmark.
All of the country's "Big Four" banks ended more than 10% lower as the prospect of a further cut in interest rates raised margin concerns.
"Another rate cut and QE (quantitative easing) seem inevitable given the impact the extended measures to manage the spread of the coronavirus will have on the Australian economy. These measures could be announced as soon as Thursday this week," analysts at ANZ said in a note.
Piling on the downward pressure, data from China, Australia's largest trade partner, showed that factory production and trade plunged in the first two months of the year, underlining the impact of the outbreak on world's second-largest economy.
The mining sector .AXMM tumbled 7.3%, as gold stocks faltered.
Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 ended 3.6% lower at 9,476.94.
The decline came even as the country's central bank slashed interest rates to a record low in an emergency move. reactions to each surprise monetary policy easing have been sell first and ask questions later. This is especially true for the equity market," analysts at OCBC bank said in a note.
Auckland International Airport AIA.NZ and Serko Ltd SKO.NZ closed about 21% and 23% lower, respectively, after they suspended their earnings forecasts due to stringent border controls imposed by New Zealand to combat the fast-spreading coronavirus.