NEW YORK, March 12 — Global stocks plunged into a bear market and oil slumped further today after stimulus efforts from the European Central Bank failed to calm investors alarmed by US 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 per cent. It was recently trading down 6.8 per cent.

US President Donald Trump restricted certain travel from Europe to the United States in a televised address about the health crisis yesterday, 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 tomorrow. He later said trade would not be affected by the restrictions.

Worry spread far beyond stocks, with concern building over companies’ lines of credit and their ability to finance activity in the short term.

The 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.

The Dow Jones Industrial Average fell 1,905.67 points, or 8.09 per cent, to 21,647.55, the S&P 500 lost 187.32 points, or 6.83 per cent, to 2,554.06 and the Nasdaq Composite dropped 490.83 points, or 6.17 per cent, to 7,461.22.

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

MSCI’s gauge of stocks across the globe shed 7.40 per cent, down more than 20 per cent from its 52-week peak.

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

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

Fed fund rate futures 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.

The dollar index rose 0.996 per cent, with the euro down 1.08 per cent to $1.1145.

The Japanese yen weakened 0.54 per cent versus the greenback at 105.14 per dollar, while Sterling was last trading at US$1.2622 (RM5.38), down 1.54 per cent 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.

US crude fell 5.28 per cent to US$31.24 per barrel and Brent was last at US$33.48, down 6.45 per cent on the day.

Spot gold dropped 3.2 per cent to US$1,582.31 an ounce. Palladium dropped 14.0 per cent to US$1,982.02 an ounce.

Among industrial metals, copper lost 1.93 per cent to US$5,422.50 a tonne.

Benchmark 10-year notes recently rose 1-10/32 in price to yield 0.6908 per cent, from 0.822 per cent late on Tuesday. — Reuters