Equity markets collapsed Monday as the rapidly spreading coronavirus fans fears over the global economy, while a crash in oil prices added to the panic with energy firms taking a hammering.

As the deadly disease claims more lives around the world, dealers are fleeing out of riskier assets and into safe havens, sending gold and the yen surging and pushing US Treasury yields to new record lows.

While governments and central banks have unleashed or prepared to roll out stimulus measures, the spread of COVID-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

Trading floors were a sea of red on a punishing start to the day, with Tokyo and Sydney plunging around six percent, while Hong Kong shed four percent.

Singapore, Seoul and Wellington were more than three percent down, while Shanghai, Taipei and Jakarta shed at least two percent. The losses tracked sharp sell-offs in Europe and Wall Street on Friday.

Driving the declines was a ferocious sell-off in the oil markets, sparked by top exporter Saudi Arabia slashing prices -- in some cases to unprecedented levels -- after a bust-up with Russia over production.

Both main oil contracts were down more than 20 percent, having lost almost 30 percent in initial business.

Saudi Arabia launched an all-out oil war Sunday with the biggest cut in its prices in the past 20 years, Bloomberg News reported, after OPEC and its allies failed to clinch a deal to cut output.

A meeting of main producers was expected to agree to deeper cuts to counter the impact of the coronavirus -- but Moscow refused to tighten supply.

In response, Riyadh cut its price for April delivery by $4-$6 a barrel to Asia and $7 to the United States.

Russia's decision not to comply had already wiped 10 percent off prices on Friday and there are warnings that prices could continue to drive lower if the two sides do not reach an agreement.

Jeffrey Halley, senior market analyst at OANDA, said: "Saudi Arabia seems intent on punishing Russia.

"Oil prices... will likely be capped over the next few months as coronavirus stalls economic growth, and Saudi Arabia opens the pumps and offers huge discounts on its crude grades."

Energy firms were slammed, with Hong Kong-listed CNOOC tumbling 16 percent and PetroChina 10 percent down, while in Tokyo, Inpex dived 13 percent and Woodside Petroleum in Sydney fell 17 percent.

"Plummeting oil prices and spreading coronavirus are fanning fears of downside risks to the global economy," said Takuya Kanda, at Gaitame.com Research Institute.

Foreign exchange markets were also extremely volatile, with traders snapping up the yen -- seen as a hedge against global instability -- and selling off the dollar owing to uncertainty over the coronavirus in the United States.

COVID-19
Equities in Tokyo have plunged almost six percent as Asian markets are hammered by virus fears and a crash in oil prices Photo: AFP / Kazuhiro NOGI

Marito Ueda, senior trader at FX Prime, told AFP: "Fears over the virus's impact on the global economy and a plummet in US yields had investors seeking the safe-haven yen."

"It is essentially a flight from the dollar," he added. The greenback fell below 103 yen, levels not seen in almost three and a half years.

Analysts warned of further gyrations as the outbreak shows no sign of abating, with more than 100,000 people infected in 99 countries.

Italy, which has seen its death toll pass South Korea as the highest outside China, has put a quarter of its population into lockdown, while sporting and public events around the world have been cancelled.

"You just don't know which way things are going to go, it makes it very hard to price anything right now," said Sarah Hunter, chief economist for BIS Oxford Economics, on Bloomberg TV. "We're seeing that in the market with the wild oscillations that are coming through."

Brent Crude: DOWN 24.1 percent at $36.68 per barrel

West Texas Intermediate: DOWN 20 percent at $32.97

Tokyo - Nikkei 225: DOWN 6.2 percent at 19,473.07 (break)

Hong Kong - Hang Seng: DOWN 4.1 percent at 25,087.80

Shanghai - Composite: DOWN 2.0 percent at 2,974.11

Gold: UP 1.7 percent at $1,702 per ounce

Dollar/yen: DOWN at 102.32 yen from 105.40 yen at 2200 GMT

Euro/dollar: UP at $1.1400 from $1.1298

Pound/dollar: UP at $1.3100 from $1.3051

Euro/pound: DOWN at 87.00 pence from 86.58 pence

New York - Dow: DOWN 1.0 percent at 25,864.78 (close)

London - FTSE 100: DOWN 3.6 percent at 6,462.55 (close)

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