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GLOBAL MARKETS-World stocks plunge into bear market after U.S. travel restrictions, ECB moves

Published 13/03/2020, 02:29 am
© Reuters.  GLOBAL MARKETS-World stocks plunge into bear market after U.S. travel restrictions, ECB moves
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(Updates prices, changes byline, dateline from previous LONDON)

* MSCI All-Country World index off over 20% from recent peak

* European shares hit lowest since 2013

* Oil slumps, gold sinks, bitcoin plunges 25%

* Wall Street briefly halts trading; VIX hits highest since 2008

By Rodrigo Campos

NEW YORK, March 12 (Reuters) - Global stocks plunged into a bear market and oil slumped further on Thursday after stimulus efforts from the European Central Bank failed to calm investors alarmed by U.S. moves overnight to restrict travel from Europe over the spread of the coronavirus.

Trading was halted for 15 minutes shortly after the open in New York after the S&P 500 index fell more than 7%. It was recently trading down 6.8%.

U.S. President Donald Trump restricted certain travel from Europe to the United States in a televised address about the health crisis on Wednesday, shocking investors and travelers, and disappointing traders hoping to see broader measures to fight the virus.

"It's not just the fear of the economy going weak, but basically being on the brink of shutting down," said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas. "It's mass selling across the board (and) we are pricing in a potential to go into another financial crisis."

Trump said the United States would suspend all travel from Europe, except the United Kingdom and Ireland, for 30 days starting on Friday. He later said trade would not be affected by the restrictions. spread far beyond stocks, with concern building over companies' lines of credit and their ability to finance activity in the short term. European Central Bank approved fresh stimulus measures and temporarily dropped banks' capital requirements to help the euro zone cope with the shock of the pandemic, but kept interest rates on hold, disappointing markets. Dow Jones Industrial Average .DJI fell 1,905.67 points, or 8.09%, to 21,647.55, the S&P 500 .SPX lost 187.32 points, or 6.83%, to 2,554.06 and the Nasdaq Composite .IXIC dropped 490.83 points, or 6.17%, to 7,461.22.

The pan-European STOXX 600 index .STOXX lost 9.89% and emerging market stocks lost 6.63%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 5.78% lower, while Japan's Nikkei .N225 lost 4.41%.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 7.40%, down more than 20% from its 52-week peak.

Investors also rushed into safe-haven assets, from bonds to the yen. Bitcoin plunged 25%, amid wild volatility in cryptocurrency markets. BTC=BTSP

The VIX volatility index .VIX - Wall Street's "fear gauge" - and an equivalent measure of volatility for the Euro Stoxx 50 .V2TX hit their highest levels since the 2008 financial crisis.

Fed fund rate futures 0#FF: are now pricing in a 1.0 percentage point cut, rather than 0.75, at a policy review next week.

The euro weakened after the ECB stimulus announcement.

Demand for dollars via the currency derivative markets surged to the highest levels in years in a sign that coronavirus-induced economic stress is starting to manifest itself in a broad scramble for funding in dollars. dollar index =USD rose 0.996%, with the euro EUR= down 1.08% to $1.1145.

The Japanese yen weakened 0.54% versus the greenback at 105.14 per dollar, while Sterling GBP= was last trading at $1.2622, down 1.54% on the day.

Oil prices were also hit, compounded by an intensifying price war between Saudi Arabia and Russia, on top of fears of a sharp slowdown in the global economy.

U.S. crude CLc1 fell 5.28% to $31.24 per barrel and Brent LCOc1 was last at $33.48, down 6.45% on the day.

Spot gold XAU= dropped 3.2% to $1,582.31 an ounce. Palladium XPD= dropped 14.0% to $1,982.02 an ounce.

Among industrial metals, copper CMCU3 lost 1.93% to $5,422.50 a tonne.

Benchmark 10-year notes US10YT=RR recently rose 1-10/32 in price to yield 0.6908%, from 0.822% late on Tuesday.

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh

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