Photo/Illutration People watch a TV screen showing a live broadcast of U.S. President Donald Trump's speech at the Seoul Railway Station in Seoul on March 12. (AP Photo)

Global shares crumbled on Thursday after U.S. President Donald Trump said the United States will suspend all travel from Europe as he unveiled measures to contain the coronavirus epidemic that has extracted a heavy human and economic toll worldwide.

U.S. S&P500 futures dropped more than 3 percent, a day after the S&P 500 lost 4.89 percent, putting the index in bear market territory, defined as a 20 percent fall from a recent top.

Euro Stoxx 50 futures dived more than 5 percent to their lowest levels since mid-2016. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 2 percent to its lowest level since early 2019, while Japan’s Nikkei lost 3.3 percent.

Australia’s benchmark dived 3.7 percent and South Korea’s Kospi fell 2.7 percent to a four-year low.

Trump announced on Wednesday the United States will suspend all travel from Europe, except from the United Kingdom, to the United States for 30 days starting on Friday.

He also announced some other steps, including instructing the Treasury Department to defer tax payments for entities hit by the virus.

But investors were hardly convinced those measures will turn around the global economy as concerns grew that the number of infections could quickly snowball in many countries.

In many European countries, the number of patients is increasing in a track similar to Italy. The United States appears to be following that path. It now looks realistic to expect, within 10 days, those countries could have more than 10,000 patients.

Safe-haven assets were back in favor, though many of them were still below recent peaks, which some market players suspect reflects a desperate bout of profit-taking to make up for losses suffered elsewhere.

Gold edged up 0.5 percent to $1,642.5 per ounce but still stood well below Monday’s high above $1,700.

The 10-year U.S. Treasuries yield fell 8.7 basis points to 0.737 percent, though it is still more than 40 basis points above a record low of 0.318 percent touched on Monday. Some analysts say the rise could reflect worries about an increase in government spending for stimulus.

The two-year yield fell 4 basis points to 0.458 percent, but stood well above Monday’s low of 0.251 percent.

Fed fund rate futures, however, are still pricing in a rate cut of at least 0.75 percentage points and about a 50 percent chance of a 1.0 percentage point cut at a policy review on March 17-18.

“The initial reaction in financial markets shows that even after Trump spoke investors feel they need to avoid risk,” said Junichi Ishikawa, senior currency strategist at IG Securities in Tokyo.

“Trump has outlined what he considered to be tough measures, but movements in stocks, stock futures, and currencies show that this is not enough to ease investors’ concerns. We are in a very difficult situation now.”

Oil prices extended losses as they were also hit by renewed weakness in the stock market and as Saudi Arabia and the United Arab Emirates announced plans to escalate the burgeoning price war.

U.S. West Texas Intermediate (WTI) crude last traded up slightly at $32.14 per barrel, down 2.5 percent.

In the currency market, the dollar slid against the safe-haven yen and the Swiss franc.

The U.S. currency fell 0.7 percent to 103.64 yen and lost 0.5 percent to 0.9333 franc.

The euro traded at $1.1272, flirting with its lowest level in a week, ahead of the European Central Bank’s policy meeting later in the day.

The ECB is all but certain to unveil new stimulus measures, including new, ultra-cheap loans for banks to pass onto small and medium-sized firms.

Markets have priced in a 10 basis point cut to its already record low minus 0.50 percent policy rate though many policymakers have said further cuts could be counterproductive because they hurt bank margins to the point of thwarting lending.

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