Stocks across the globe have fallen to their lowest since mid-December and the benchmark US debt yield was near a record low on lingering concerns about the economic hit of the spread of the novel coronavirus.

The yen strengthened against the dollar end euro in a sign traders were in search of relatively safer assets.

Countries around the world are stepping up efforts to prevent a pandemic of the flu-like virus that has now infected more than 80,000 people, 10 times more cases than the SARS coronavirus.

The World Health Organisation, however, has said the epidemic in China, where it began in December, peaked between 23 January and 2 February and has been declining since.

In Europe banking shares were among the biggest drags, while car makers also dropped as investors worried Europe's trade-reliant economy would take a bigger toll from the outbreak than previously thought.

Traders knocked about $500 billion off the value of European companies yesterday after Italy unveiled it was struggling with the worst flare-up of coronavirus cases in Europe, reporting 220 cases and seven dead.

London, Frankfurt and Paris all closed 1.9% lower today, while the ISEQ in Dublin finished with a 1.4% loss.

On Wall Street, where stocks fell the most In two years yesterday, indexes shed another 1% at session lows.

"A lot of people who have been woken up by the volatility of the stock market will start to get a little panicky," said Tom Plumb, president of Plumb Funds in Madison, Wisconsin.

The risks are such that bond markets are starting to bet central banks will have to ride to the rescue with new stimulus.

Futures for the Federal Reserve funds rate have surged in the last few days to price in a 50-50 chance of a quarter-point rate cut as early as April. In all, they imply more than 50 basis points of reductions by year end.

The indication of falling US rates hit the dollar against a basket of its peers.

"Signs of the USD being penalised for having a central bank with some capacity to cut rates raises the question of whether rate spreads are likely to become a key driver any time soon," said Alan Ruskin, chief international strategist at Deutsche Bank.

The coronavirus death toll climbed to seven in Italy yesterday and several European countries were dealing with their first infections, feeding worries about a pandemic.

The rush to bonds left yields on 10-year US Treasury notes near the record low of 1.321%. rose 15/32 in price to yield 1.3288%, from 1.377% late yesterday.

Gold ran into profit-taking after hitting a seven-year peak overnight and last dropped 0.9% to $1,645.75 an ounce.

Oil prices continued to fall as demand concerns linked to the virus' spread outweighed supply cuts.

US crude fell 1.81% to $50.50 per barrel and Brent was last at $55.48, down 1.46% on the day.