* "Big Four" lenders drop between 2% and 2.9%
* Gold stocks mark best intraday gain in over 6 months
* Air New Zealand down, confirms coronavirus case on board
By Niyati Shetty
March 4 (Reuters) - Australian shares fell on Wednesday as investors fled to the safety of bonds on fears that the U.S. Federal Reserve's emergency interest rate cut would not be enough to buffer the global economy from the widening fallout of the coronavirus.
The S&P/ASX 200 index .AXJO declined as much as 1.7% and was down 1%, or 63.2 points, at 6,372.5 by 0023 GMT, heading for an eighth session of drop in nine.
Hot on the heels of the Reserve Bank of Australia's 25 basis point rate cut on Tuesday, the Fed shaved off half a percentage point from its key rates, in an emergency move that highlighted its urgency to prevent a possible global recession. seems unclear what rate cuts will do though, but the market has demanded them, and central banks have no choice but to meet the market (demand) or risk causing more damage and higher volatility," Chris Weston, head of research at brokerage Pepperstone, said in a note.
"What started as a concern about the extent of fragility to the Chinese economy has mopped into a worldwide problem."
Australian bonds have surged in the past week or so, driving yields AU3YT=RR to record lows, as investors priced in more rate cuts by central banks around the world.
Financials .AXFJ will likely be the worst hit as the low interest rate environment will bite into bank margins.
The sub-index was down 2%, with the "Big Four" lenders shedding between 2% and 2.9%. Brokerage UBS cut its earnings forecasts for the sector as low rates could further pressure capital generation and dividends. & gas companies fell as crude prices slipped overnight on demand concerns. Woodside Petroleum Ltd WPL.AX dropped as much as 2.6%, while Oil Search Ltd OSH.AX lost 2.8%. O/R
Tech firms .AXIJ slumped 3.7%, in line with declines in Wall Street peers overnight. Computershare Ltd CPU.AX shed 6.6%, while WiseTech Global Ltd WTC.AX was down 3.7%. .N
Gold stocks .AXGD jumped as much as 5.3% in their best intraday gain in more than six months, as bullion prices soared more than 3% overnight. GOL/
Miners Saracen Mineral Holdings Ltd SAR.AX and Northern Star Resources Ltd NST.AX were among the top gainers on the broader benchmark index, jumping 11.6% and 9.2%, respectively.
New Zealand's benchmark S&P/NZX 50 index .NZ50 was down 0.3%, or 28.85 points, to 11,317.46.
Air New Zealand Ltd AIR.NZ fell 3.5% after the company confirmed that a passenger on board tested positive for the coronavirus.