Chinese equities plunged almost eight percent Monday as nervous traders returned from their extended Lunar New Year break, hit by fears that the deadly coronavirus could hammer the country's economy.

The steep losses led another sell-off across Asia following a painful week for global markets with the virus death toll topping 360 people and more than 17,000 infected, and governments around the world banning flights to and from China.

Oil prices hit 13-month lows at the start of Asian trading on expectations that crude demand could slide as the virus hits economic output.

OPEC members and their ally Russia will convene a technical meeting this week to analyse oil price falls since the outbreak of a coronavirus epidemic, a source close to the cartel said on Sunday.

Brent North crude dropped to $55.42 per barrel and WTI to $50.42 on Monday -- the lowest levels since January 2019. Prices recovered in European trading.

In foreign exchange, sterling slid one percent versus the dollar on Monday, hit by worries over post-Brexit trade deal negotiations after Britain's exit from the European Union last Friday, dealers said.

The pound's tumble helped to lift London's benchmark FTSE 100 index.

Sterling's slide is "generally good for companies whose shares are priced in pounds but who earn in foreign currencies including the dollar", noted Russ Mould, investment director at AJ Bell.

Elsewhere, "Chinese stocks played catch-up... as its markets reopened after more than a week's closure", said Mould.

"While the scale of this movement is enormous in terms of daily stock market action, it essentially puts China's market more in line with how the Hong Kong index has reacted in the past few weeks."

Analysts have warned that the virus outbreak could slash global growth this year, throwing a spanner in the works just as economies were showing signs of stabilising after more than a year of slowing.

Observers said that with China being a crucial part of the global trade infrastructure, other countries would also be badly hit, while major corporate names have frozen or scaled back their Chinese operations, threatening the global supply chain.

The World Health Organization last week invoked a global health emergency but stopped short of recommending trade and travel restrictions that could have had a bruising effect on China.

Still, JP Morgan Asset Management strategist Tai Hui remained relatively upbeat about the future.

"As the number of infections is still likely to rise in the weeks ahead, we would expect the Chinese onshore equity market to come under pressure," he said in a note.

"That said, we still believe that economic activities should recover swiftly once the number of new cases comes under control, and subsequently market sentiment should also improve."

Novel Coronavirus
Several countries have banned flights to and from China as the coronavirus continues to spread, fanning concerns about the impact on the world economy Photo: AFP / Mark RALSTON

London - FTSE 100: UP 0.5 percent at 7,321.40 points

Frankfurt - DAX 30: UP 0.2 percent at 13,007.73

Paris - CAC 40: UP 0.3 percent at 5,821.37

EURO STOXX 50: UP 0.2 percent at 3,649.14

Shanghai - Composite: DOWN 7.7 percent at 2,746.61 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 26,356.98 (close)

Tokyo - Nikkei 225: DOWN 1.0 percent at 22,971.94. (close)

New York - DOW: DOWN 2.1 percent at 28,256.03 (close)

Pound/dollar: DOWN at $1.3060 from $1.3206 Friday

Euro/pound: UP at 84.73 pence from 83.99 pence

Euro/dollar: DOWN at $1.1067 from $1.1093

Dollar/yen: UP at 108.42 from 108.35

Brent Crude: DOWN 0.5 percent at $56.36 per barrel

West Texas Intermediate: UP 0.2 percent at $51.67

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