LONDON/SYDNEY/HONG KONG - Global stocks plunged on Monday and prices for crude oil tumbled as much as 33 percent after Saudi Arabia launched a price war with Russia, sending investors already panicked by the coronavirus fleeing for the safety of bonds and the yen.

Saudi Arabia had stunned markets with plans to raise its production significantly after the collapse of OPEC's supply cut agreement with Russia, a grab for market share reminiscent of a drive in 2014 that sent prices down by about two thirds.

The shock in oil was seismic, with Brent crude futures sliding US$12 to US$33.20 a barrel in chaotic trade, while US crude shed US$11.80 to US$29.48.

European markets suffered hefty losses in early trade with London dropping more than 8 percent, Frankfurt falling more than 7 percent and Paris almost matching those losses.

The pan-regional STOXX 600 tumbled into bear market territory - a drop of more than 20 percent from recent peaks. Oil stocks suffered massive losses with Tullow down 57 percent and BP down 27 percent in early trade.

In Asia, stocks and emerging market currencies with exposure to oil tumbled in volatile trade while the safe-haven yen surged.

Heavy selling was set to continue on Wall Street with US futures hitting their down limit.

Investors drove 30-year US bond yields beneath 1 percent on bets the Federal Reserve would be forced to cut interest rates by at least 75 basis points at its March 18 meeting, after having already delivered an emergency easing last week.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 4.4 percent in its worst day since August 2015, while Shanghai blue chips fell 2.9 percent.

Japan's Nikkei dropped 5.1 percent and Australia's commodity-heavy market closed down 7.3 percent, its biggest daily fall since the 2008 global financial crisis.

BOND BUBBLE

A tectonic shift saw markets fully price in an easing of 75 basis points from the Fed on March 18, while a cut to near zero was now seen as likely by April.

The European Central Bank meets on Thursday and will be under intense pressure to act, but rates there are already deeply negative.

The yield on 10-year US Treasuries last sat at 0.4624 percent having halved in just three sessions.

Yields on the 30-year bond dived 35 basis points on Friday alone, the largest daily drop since the 1987 crash, and slid under 1 percent on Monday to reach 0.7020 percent.

The fall in yields and Fed rate expectations has pulled the rug out from under the dollar, sending it at some point crashing to the largest weekly loss in four years.

The dollar extended its slide in Asia to as far as 101.58 yen, depths not seen since late 2016. It was last down nearly 3 percent at 102.28 in wild trade.

The euro likewise shot to the highest in over 13 months at US$1.1492, to be last at US$1.1422.

Gold initially cleared US$1,700 per ounce to a fresh seven-year peak, only to fall back to US$1,676.55 amid talk some investors were having to sell to raise cash to cover margin calls in stocks.