Australian stocks saw their worst day since the financial crisis. (Photo: AFP)

World oil prices crashed Monday, fuelling a vicious selloff on stock markets which were already buckling under intense pressure over the spreading coronavirus outbreak.

Stocks tanked as the global oil market nosedived 30 percent at one stage after top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts.

The dollar slid versus the yen, seen as a safe haven investment.

The New York markets tumbled at the opening with the DJIA immediately down nearly six percent, playing catch up with Europe where London, Paris and Frankfurt were all off more than eight percent.

Shortly after the open in New York trading was halted for 15 minutes after losses hit 7 percent.

"The markets have passed from panic mode into pure hysteria," said Ayush Ansal, chief investment officer at trading firm Crimson Black Capital.

"Markets were at breaking point before Saudi Arabia's decision to launch an oil price war but this latest development has taken them beyond that."

OPEC kingpin Saudi Arabia last week wanted Russia to join the cartel in deep production cuts after world oil prices slumped on forecasts of plunging demand because of COVID-19.

However, Moscow declined, triggering Riyadh's move to preserve market share and sideline its close competitor -- but it has created fresh market chaos.

"The war against the coronavirus is turning into a war for oil export markets," said analyst Tamas Varga at oil broker PVM Associates.

The dizzying oil drop -- the steepest since the 1991 Gulf War -- sent investors fleeing for safety alongside mounting fears over the worsening coronavirus, which has seen Italy lock down a swathe of its north.

'Black Monday' 

"This will be remembered as Black Monday," said analyst Neil Wilson at trading site Markets.com.

Italy's stock market took the heaviest battering after a chunk of the county's northern region was sealed off -- including Milan and Venice -- as authorities struggled to contain the spread and impact of coronavirus.

In exceptionally volatile trade, Milan's FTSE MIB index shed more than 11 percent in mid-afternoon trade.

As the disease claims more lives around the world, dealers are shedding riskier assets for safehavens, sending gold and the yen surging and pushing US Treasury yields to record lows.

While governments and central banks have unleashed or prepared stimulus measures, the spread of COVID-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

Trading floors in Asia were also a sea of red, with Tokyo plunging more than five percent by the close, while Hong Kong shed 4.2 percent. Sydney slumped 7.3 percent.

Saudi equities tanked more than nine percent with oil titan Aramco's share price losing 10 percent. Dubai and Kuwait stock markets sank a similar amount, while Abu Dhabi was almost eight percent down.

 Energy firms hammered 

Oil majors also bore the brunt of a fierce wave of selling while other commodities firms nursed heavy losses.

Hong Kong-listed CNOOC tumbled 17 percent and PetroChina more than nine percent, while in Tokyo, Inpex dived 13 percent. In Sydney, Santos dived 27 percent and Woodside Petroleum tanked 18.4 percent.

In London, BP shares dived 18.2 percent and Shell 12.7 percent at one stage. French energy major Total slumped 11.6 percent.

Among miners, Anglo American shed 9.4 percent and BHP Billiton sank 14 percent.

Analysts meanwhile warned of further gyrations as the outbreak shows no sign of abating, with more than 110,000 people infected in scores of countries -- including Italy, which is now the hardest-hit country outside China.

Key figures around 1140 GMT 

Brent Crude: DOWN 21.4 percent at $35.75 per barrel

West Texas Intermediate: DOWN 21.9 percent at $32.45

Milan - FTSE MIB: DOWN 11.34 percent at 18,459 points

London - FTSE 100: DOWN 8.4 percent at 5,923

Frankfurt - DAX 30: DOWN 8.3 percent at 10,578

Paris - CAC 40: DOWN 8.5 percent at 4,701

EURO STOXX 50: DOWN 8.8 percent at 2,943

Tokyo - Nikkei 225: DOWN 5.1 percent at 19,698.76 (close)

Hong Kong - Hang Seng: DOWN 4.2 percent at 25,040.46 (close)

Shanghai - Composite: DOWN 3.0 percent at 2,943.29 (close)

Sydney - S&P/ASX 200: DOWN 7.3 percent at 5,760.60

New York - Dow: DOWN 7.3 percent at 23,979

Dollar/yen: DOWN at 101.34 yen from 105.39 yen at 2200 GMT

Euro/dollar: UP at $1.1463 from $1.1284

Pound/dollar: DOWN at $1.3109 from $1.3048

Euro/pound: UP at 87.39 pence from 86.48 pence