Stocks pummeled, futures indicate rough day ahead on Wall Street

Australian stocks tumbled 6 per cent after oil prices crashed. Photo / AP

Asian share markets, already weakened by the likely economic impact of the coronavirus outbreak, went into convulsions in response to plummeting oil prices.

By late in the Australian session, stock pries had fallen by 6.9 per cent - their biggest decline since the Global Financial Crisis.

The benchmark S&P/ASX200 index had dropped by about 400 points to 5817, led by falls in the big energy stocks.

US stock futures tumbled, with the losses triggering exchange rules that limit declines at 5 per cent, as plummeting oil prices added to the backdrop of dread surrounding the coronavirus.

The drop easily erased the rally that lifted cash equities in the final hour of trading on Friday, as crude sank more than 20 per cent in the deepest rout since the U.S.-led war in Iraq in 1991, Bloomberg reported.

While energy and commodity stocks only make up about 5 per cent the S&P 500, plunging crude prices exacerbated the blow to sentiment and stood as one of the starker signals of the outbreak's economic toll, the international financial news agency reported.

Australia is the world's biggest exporter of liquefied natural gas (LNG).

Among the Australian energy sector stocks, Woodside Petroleum fell by 22 per cent to A$21.80 and Santos fell by 25 per cent to A$5.00.

Shares in Oil Search fell by 32 per cent to A$3.47 and Beach Energy shed 20 per cent to A$1.32.

By the close, New Zealand's S&P/NZX50 Index had fallen by about 2.9 per cent to 11,092.

Harbour Asset Management portfolio manager Shane Solly said the New Zealand share market was relatively sheltered.

"We don't have a big energy sector so we are a little bit sheltered from it all," Solly said.

"Having said that, the larger, liquid socks are coming under some pressure," he said

Meanwhile NZ 10 year bond yields sank to 0.86 per cent - a record low.

Around the Pacific, Tokyo's benchmark index tumbled 6.2 per cent, Seoul's sank 4.4 per cent and Hong Kong's lost 3.9 per cent.

Futures market pricing also suggested heavy falls were in store for the US and UK sharemarkets overnight New Zealand time.

Earlier, oil prices plummeted by 30 per cent - the biggest one day fall since the start of the first Iraq war in 1991.

Australian stocks have tumbled in respone to plummeting oil prices. Photo / File

Brent crude oil fell by about 20 per cent.

This follows falls of 10 per cent at the weekend on fears that Russia and Saudi Arabia will launch a full-scale price war.

TO READ THE HERALD'S FULL CORONAVIRUS COVERAGE CLICK HERE

Saudi Arabia slashed the price of its crude and upped production after Opec and Russia failed to agree on a supply response to coronavirus.

The industry had hoped that major players would agree on production cuts to mitigate the impact on global demand, but talks over the weekend in Vienna failed to reach an agreement.

The slowdown of the global economic activity caused by Covid-19 coronavirus has seen demand for fuel fall dramatically since January.

Prices for benchmark Brent crude and West Texas crude are now down close to 50 per cent since the most recent pre-virus peak.

The slowdown of the global economic activity caused by Covid-19 coronavirus has seen demand for fuel fall dramatically since January.

Prices for benchmark Brent crude and West Texas crude are now down close to 50 per cent since the most recent pre-virus peak.