By Thyagaraju Adinarayan and Saikat Chatterjee
LONDON (Reuters) - Stocks resumed their plunge, wiping out more than $3 trillion in value this week alone, and U.S. Treasuries yields hit record lows on Thursday as the coronavirus spread faster outside China and investors fled to safe havens.
The number of new coronavirus infections in China - the source of the outbreak - was for the first time overtaken by fresh cases elsewhere on Wednesday, raising pandemic fears.
(Graphic: Daily market value loss - https://fingfx.thomsonreuters.com/gfx/buzzifr/15/7815/7815/Pasted%20Image.jpg)
"Safe-haven currencies are doing very well and gold is heading back higher, and unless we see a slowdown in the coronavirus cases outside China, risk sentiment will continue to be undermined," said Peter Kinsella, global head of FX strategy at UBP in London
Meanwhile, the yield on U.S. Treasuries, which falls when prices rise, dropped below 1.3% (US10YT=RR) and the yield curve continued to send recession warnings.
Markets are pricing a roughly even chance of the Federal Reserve will cut interest rates next month and have almost fully priced in a cut by April. <0#FF:>
Yields on benchmark German 10-year maturities (DE10YT=RR) fell to -0.5140%. Italian debt underperformed as Europe's worst flare-up of the virus in that country raised fears of a recession there.
(Graphic: U.S. stock futures- https://fingfx.thomsonreuters.com/gfx/mkt/13/2595/2560/US%20stock%20futures.png)
Analysts have downgraded forecasts for Chinese and global growth, and policymakers from Asia, Europe and the United States have begun to prepare for a steeper economic downturn.
South Korean stocks (KS11) shed another 1.05% on Thursday, closing at a four-month low, as it reported its largest daily rise in new virus cases since first case last month.
Unnerving investors further, the Bank of Korea kept interest rates unchanged on Thursday, even though it downgraded its growth outlook.
With the infections rate in China slowing, the blue-chip CSI300 index (CSI300) finished up 0.3%. China's central bank said on Thursday that it would ensure ample liquidity to help limit the impact of the epidemic.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 0.5%, taking it more than 4% lower for the week.
Safe-haven currencies such as the Japanese yen and the Swiss franc gained on Thursday with the Japanese currency heading towards 110 yen to the dollar, up nearly 2% so far this week. The dollar fell 0.32%.
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