* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures hit limit down, European futures slide
* Asia shares under water, NZ market sinks by record
* US 10-year bond yield drops to 0.80%
* More countries shut businesses, tell people to stay home
By Wayne Cole
SYDNEY, March 23 (Reuters) - Asian shares sank on Monday as
a rising tide of national lockdowns threatened to overwhelm
policymakers' frantic efforts to cushion what is likely to be a
deep global recession.
In a foretaste of the pain to come, E-Mini futures for the
S&P 500 ESc1 dived 5% at the open to be limit down, while
EUROSTOXXX 50 futures STXEc1 tumbled 6.4%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lost 3.8%, with New Zealand's market shedding a
record 10% .NZ50 as the government closed all non-essential
businesses.
Shanghai blue chips .CSI300 dropped 2.3%, though Japan's
Nikkei .N225 rose 0.8% aided perhaps by expectations of more
aggressive asset buying by the Bank of Japan.
There was little to cheer in coronavirus news as the global
death toll exceeded over 14,000 with more than 300,000
infections.
Airlines cancelled more flights as Australia and New Zealand
advised against non-essential domestic travel, the United Arab
Emirates (UAE) halted flights for two weeks and Singapore and
Taiwan banned foreign transit passengers. Nearly one in three Americans were ordered to stay home on
Sunday to slow the spread of the disease, while Italy banned
internal travel as deaths there reached 5,476. U.S. President Donald Trump went on TV to approve disaster
deceleration requests from New York and Washington, while St.
Louis Federal Reserve President James Bullard warned
unemployment could reach 30% unless more was done fiscally.
Analysts are dreading data on weekly U.S. jobless claims due
on Thursday amid forecasts they could balloon by 750,000, and
maybe by more than a million. U.S. stocks have already fallen more than 30% from their
mid-February peak and even the safest areas of the bond market
are experiencing liquidity stress as distressed funds are forced
to sell good assets to cover positions gone bad.
WAITING ON THE DISEASE
"It would be a brave, or foolish, man to call the bottom in
equities without a dramatic medical breakthrough," said Alan
Ruskin, head of G10 FX strategy at Deutsche Bank.
Also needed would be evidence that China could re-emerge
from the pandemic without reigniting infections, and that other
major economies had hit inflection points for infection rates,
he added.
"Even were social distancing to subside at the earliest
plausible dates in Europe and the U.S., it will have done
extraordinary damage to confidence in a host of key sectors,"
Ruskin said.
The mounting economic toll led to a major rally in sovereign
bonds late last week, with efforts by central banks to restore
liquidity in the market allowing for more two-way trade.
Yields on the benchmark U.S. 10-year note US10YT=RR were
down at 0.80%, having dived all the way to 0.84% on Friday from
a top of 1.28%.
In New Zealand, the central bank announced its first
outright purchase of government paper aiming to inject
much-needed liquidity into the local market. In currency markets, the first instinct on Monday was to
dump those leveraged to global growth and commodity prices,
sending the Australian dollar down 0.8% to $0.5749 AUD=D3 .
The U.S. dollar started firm but took a step back after
partisan battles in the U.S. Senate stopped a coronavirus
response bill from advancing. The dollar eased 0.5% to 110.23 yen JPY= , while the euro
recouped losses to be up 0.1% at $1.0707 EUR= .
Against a basket of currencies the dollar was still a
fraction firmer at 102.510. =USD
The dollar was a major gainer last week as investors fled to
the liquidity of the world's reserve currency, while some funds,
companies and countries desperately sought more cash to cover
their dollar borrowings.
"Further dollar strength would not be helpful for the U.S.
or global economies, and in our view policymakers should
consider direct intervention, in addition to further
enhancements to central bank USD liquidity facilities," said
analysts at Goldman Sachs in a note.
"We expect the dollar to remain firm against most crosses
until policymakers intervene and/or market conditions begin to
stabilize."
The steady rise in the dollar undermined gold, which slipped
0.3% to $1,493.83 per ounce XAU= . GOL/
Oil prices turned mixed after opening sharply lower. Brent
crude LCOc1 futures slipped 69 cents to $26.29 a barrel, while
U.S. crude CLc1 gained 30 cents to $22.93. O/R
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(Editing by Sam Holmes & Shri Navaratnam)